Hidden errors on credit reports are surprisingly common, and can hold you back from achieving your financial goals. John Hope Bryant, CEO, Operation Hope and financial literacy expert joined TheStreet to discuss his best tips for taking control of your credit score while building generational wealth.
Related: Economy relatively strong despite high interest rates
Full Video Transcript Below:
CONWAY GITTENS: I always like getting tips. So is that your first tip on how to bring your credit score up is actually look at your credit score?
JOHN HOPE BRYANT: Yeah Yes. Yes the first tip is actually look at it because most people don't know there's an error sitting there on your credit report. And credit bureau credit reporting agencies are passive. They're not going to sit there, hey, there's an error. They let it sit there. They're the repositories. You got to say, that's not mine. Now the law states again, 30 days. Once you challenge it, they must confirm it or remove it, and most times they remove it. Again pop your credit score. Now your confidence goes up your self. You say, what else. Now we negotiate that charge off from 10 years ago when you divorced for pennies on the dollar. You owed $1,000 on a phone bill from a divorce. Well, by 10 years later, it's been sold from AT&T to Pacbell to Joe's finance company, who bought it for $0.05 on the dollar. We call them and they want 50 bucks. We give them $100. So they want $100 for a $50 charge. We pay them. $200 so they cooperate. Keep pulling that off your credit report. So now you've got an 80% discount. They've got a 200% profit. Everybody wins. And that comes off your credit report. That's another 25 to 30 points.
Earned income tax credit. You make less than $60,000 a year. And let's be specific. You make $40,000 a year. You've got three kids. Government owes you about $5,000 or $6,000 in cash. Call the EITC. If you've never filed, it's retroactive for three years. So anybody watching this who goes who knows anybody in their family who made less than $60,000 a year and you go, what's that again. Congratulations you're approved. That's all it takes. It's retroactive for three years. So if you make $40,000 a year and you get a $15,000 check, it changes your life.
Pay off those credit cards, which is in the trillions now of national the national number. Pay down that student loan. Pay off that car loan. Refinance it or pay it. Pay it down. Put a down payment on a house. Get out of that apartment and get into wealth creation. Number one way you build wealth in America is home ownership. Go buy your little insurance policy when you're 35 years old, starting a family, get a $100,000 policy for 25 bucks a month. That's what it costs us nothing. So now when you pass away, god forbid you'll pay for your funeral and you'll create generational wealth. And if you buy if you buy that house and you do that three times in five years, a house for yourself, equity in three years. Take a little home equity loan. You have a million net worth in 5 to seven years.
Now, just in four minutes from this book, I just told people who are working an hourly job, like my mother, how to become a millionaire. Stop arguing with your husband and your wife over money, which is the number one cause of divorce, by the way. Stop getting hypertension because the number one cause were heart attacks. Stress, the number one cause for stress is money. And get your mind out of depression and surviving and into aspiration and prosperity. And this hits on a big thing on Wall Street. People say, I hate rich people. I hear it all the time. I hear people say, why do people hate rich people. They don't hate rich people. They hate rich people until they become rich. What they hate is the gamed system. And no one is, to your point, is explaining how this thing works.
