HerMoney Classic: Achieving The Perfect Credit Score
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Everyone at gene ski, thanks so much for joining us today on her money. If you listen to this week's episode with Michelle single Terry, personal finance columnist at the washington post, you know just how smart he can be about saving and investing for her goals and and for her family's long term goals. You probably also won't be all that surprised to learn that a few years ago, SHE achieved something many of us can only dream of.

SHE woke up one morning, and he found that he had the elusive perfect credit score of eight hundred fifty. And with that, he made up a very, very small percentage of the population. According to the data from experience, only one and a half percent of consumers in the united states have a perfect credit score.

Now many of us won't ever achieve the perfect credit score or even get close. I'm certainly not there. And by the way, I don't think that perfection is necessary in this part of our lives as long as you get your credit score into a good enough range where you are qualifying for really good interest strates on the products that you're shopping for, you are fine. But I did want to bring this episode back to the top of your listening list today as we have been talking about the federal reserve and interest rates this week because IT brings with IT a little bit of inspiration and a whole lot of really top tips will dive right into my conversation with Michelle. Michelle, thanks so much for being on the line and spending a little bit of time with us today.

Oh, i'm so honor. Thank you for having .

me IT has been too long since we have seen each .

other IT have, as I can think you know.

we have to start with that score because, you know, perfect credit score, perfect S A T score. Fill all of your secrets, please.

So, you know what is so funny? I check my credit score really as a part of identity, that because, you know, if your score drops, then there's something funky going on. Sorry, check IT fairly regularly. I end a little big brain and rice with minds, always a low hide in my husband and some checking IT. And I thought would as a mistake, that just must be like the holding place that they have for scores.

And then I checked in a couple places because a lot of your lenders now allow you to have your a fight score and it's an official bike score, not the sort of consumer one a day I had previously. And salt, I think IT was like four other places that was think three of my bags, and then discovers site for free credit scores. And they will also eight, fifty.

And I have to tell you, I don't do anything special. I didn't like vision and people who are like out there managing cards and closing step and not closing stuff to try to get A V C. Basically, the secrets I pay all my bills on time, all the time. I learned up from my grandmother.

SHE was a thematic about making sure her bills, not just on the SHE, wanted to get in before the two day, just in case something happened as back when used to male stuff that I paid everything before, it's do I like manic about IT and you know ahead mix of credit. But if I have a credit card, I don't like news, whatever the max is, and know this conventional wisdom that you don't use more thirty percent. But h studies show that those who have high in the eight hundred credits reviews, or the average about seven percent, and I use about one percent, and that's overall and per month. So even in a month, if i'm gonna make a big porches, I still don't get anywhere near like, nowhere near new like temple like that, because I just that money you get to pay everything, and we pay our bills of every single month. And that's fully the recipe and that's all of done.

You know, I think that utilization ratio, that one percent to two percent of your available credit that you're using, I think that was the secret sauce. I mean, that was the thing because I do everything that you do. I pay my bills on time every time I pay him early because I actually like to pay them when I get them, because that makes me just feel like a calmer, happier human being.

But i'm a little closer in terms of my utilization, a little higher in terms of my utilization. And I got to tell you, I don't have the bragging rights in my house. My husband has the bragging rights and I am i'm close to eight hundred, but i'm nowhere close to fifty.

And when I saw eight fifty, I like like eight thirty just say, yes, so happy. But I think you're right. And what happens is we sort of think, and especially those folks who pay their bills over month, that that's all that IT takes.

But you still want to look at per month what you're spending for a couple reasons. You know not just your specific the whole credit for thing because really, like you said, you are not your credit or all all the create store shows is how you use dead IT says your good data. So I don't painting to that.

But if you keep your aliza dale IT also means that should not be in a little credit. And those who pay the bills of money, they so proudly big sha, I paid off. But you still could be overspending, even though you are paying IT off every month.

And that's the key. So I when I got to charge and really saying, do you really need this? You, yes, sure, you can pay.

Do you really need that? And i'm just costly talking to myself because we have three kids to put to college, and we want to make sure that we put them to college and we are debt free. And so that's what sort of cut me on track and upside as I got this perfect credit.

What i've read that you not only want to put your kids through college det. Free, but you you would put them through grad school det free. I mean that is that is ambitious.

I I mean i've ve been a journalist a very long time. We do good work, but you know not not the highest paying profession on the planet. So how are you doing this?

You absolutely. I said that people like, no, I think any money and inhered any money, but hutting rise to the government with regular wage jobs. But he is, he's not reasoning, and you have to decide for yourselves, right? Because so this is my philosophy on my children.

We know that they need, most of them need to cause education. We also know that the undergraduate degree has been devalued. So for a lot of careers, you actually need a graduate degree.

And two of my kids want to go into education. One wants to be um a social worker working with children, and the other wants to be a special add that they have to get masters. And so knowing this but also knowing that not why children had full time jobs while they were children.

And so all those years their children are not save enough for college or grab school. So that means that for them to afford college and grab school, if we don't say they have to take out loans. And so when they were little weed people, my hasn't, I decided that we were gonna give this to them, this freedom, this financial freedom.

And so we lived way below our means when all our peers were getting big cars and luxe cars and relaxes and bmw, and then you walk into their house that looks like a museum. Know how? Like you? Yes, know, turn out what the questions should be OK.

And so we wanted to give them that. And we also didn't want them to worry about that graduate degree, which when you look at the outstanding to moon dead, you know, was almost one point trillion. Lot of that is graduate with debt.

And so we wanted to make sure that they went in there, particularly the two that decided they wanted to go into fix dead. Not a lot of people go and to, because you don't make a lot of money. And so we just bunker down, honker down in every month.

Religious ly put money away whenever I got extra money, like I do books at Q T. Books when I got my advance. And and my book money IT all went to the color friend.

Like, we didn't get a car. I didn't get A R. I didn't get jury. I didn't get anything.

I just put all of IT and being an honest, just like all of IT, into their college fines for the first one. And then just for eighteen years, he is tossed in in there. And then between that and they got A P credit.

So all my kid started off college or will start off the last one with about a semester or two worth of credits, so that next almost a year, often turns a real money. That's huge. And then they all get scholarships because .

they're brilliant.

Wow, you know who's their mom? no. But now I didn't get started here. He has autism, and so he didn't get a lot of money or any money but that's take us we say for him, we say for them for the flow ride without any styling ship money, especially the girls with the girl's getting scholarship money that helps us have enough uh, for grad school and then we save outside we we saved in five, twenty nine, twenty and we saved outside the fed twenty nine plans as well and in a index grow fun uh and between those two we get them covered right to grad school and for us that's the like to see that we wanted to .

it's all about priority. So right, I mean, I hear you talking and and what you're saying is you prioritize their education. This was the decision that you and your husband made. You made IT early, which was a blessing. And then you stuck with IT. How did you baLance IT though with saving for your own retirement? I mean, i'm sure you've given the same advice that i've given, which is that can sabotage retirement because of college.

you you know and again, it's all about starting early and knowing what you want. And my husband are very determined about that. And so we say with them and I did not impact our retirement in the least bin, we will put money in out in my case for one k his case that their savings plan, we didn't do the max, which is interesting because people, you time max out, what we couldn't do the max because we were saying for college, but we were a little maybe aggressive in terms of what we put our money and not initially, initially with crazy conservative was really ridiculous.

And then we kind of get smart about IT and took probe a little bit more more rist in some, but still very diversified. And just again, in away money. Now bet the way you can do, but is that you've got to cut your light down on the areas.

We keep our cars until we are on a first name basis with the local tota driver at the fifth. You know, I we don't have a like love. I mean, myself and in my kids are not kidding you.

We might go to the more if it's three times a year. That's probably exaggeration. We don't use shopping as a form of entertainment.

In fact, when we go to the movie is we purposely select a movie deal that is not connected to a mall so that we you're not walking through attempted to buy the thing that we split on. We do take family vacations every year, two weeks at a nice Spark star kind of place. But everything else doing the year, it's going we don't care.

wow. Well, I want to talk a little bit about how you do this if you're getting a late start and also if you are having a little bit of trouble with that spending, that's that's getting in the way of saving for your goals. But before we do that, we're gonna take a quick break.

Her money is proudly sponsored by adult financial engines with the cost of everything on the rise, including health care, housing, college educations and so much more. It's time to check in with your investments and make sure your money is working just as hard as you do, because the best way to help make sure your money is is there for you in retirement and whenever you need at most is to have a strategy for tackling all of lives, rising costs, visit plan E F E outcomes, slash her money to schedule your complimentary wealth check up today.

We're talking with Michelle singletary, personal finance columnist for the washington post. So if you are apparent listening and you are now holding your stomach because you didn't start early, you didn't start early enough for college, you didn't start early enough for retirement, what do you do now?

So you don't panic and don't let our conversations make you feel I would never want anyone to feel guilty that I did this in my studying, in my toys. Well, you know, I had a grandma that who taught me a line of this. SHE didn't invest, but he was great with her money.

So I had a head start on you from someone who wanted to make sure I was a good money manager. But if you decide, you wake up me that all lord. So now you have to manage bull, your expectations and your child expectations.

We know that college is important, but they don't have to go like everybody else goes like, let's just say, I didn't do what I did. My kids would not have gone out of state. I mean, they all went in state, but they wouldn't out of state, they would commute.

They go to the two year community college first, get all those, you know, requirements out of away, and then transfer to the four year university. And so there are ways to do this without the full, you know, go stay in a room, room and board, because room and board is a fifty percent of what you pay now, and you are borrowing for that. For me, that's like borrowing to rent an apartment.

We would never tell people to borrow money to pay the rent. And so you have to say, you know what, they are still gonna a good color education, but they're not gonna IT the traditional way. And that's okay.

You have to be okay with you and you have to make your kids OK with IT don't put the decision in their hands. Their eighteen or seventeen years old, you know best. I I worked with my husband in IT out. Sure and we run a financial program, all your law on. And one of the top things that way, people down at all age is right up until the retirement is too long.

That and it's time and time I get if you get to that point and you don't have enough and you sit down with your child or you should have been in there alone but I said, you did you said, honey, mom and dad or mom, mom or just dad, we just didn't have IT. We didn't know what we should have done. So let's look at what we can do getting you the college, but you may not have the experience that say, some of your friends are gonna have.

Speaking of strategies, I want to just touch in the last few minutes that we have on your financial fast. Tell us about this twenty one day jump start to getting out a debt I .

had love this fast. IT is crazy hard. But I will make you on the face, you know this, not one of those sort of microwave solutions.

People come up with these things, and I hadn't really tried IT one hasn't. I tried to set out church. And for twenty one days, you can spend on anything that is not unnecessary.

And you can use credit and you can use your debit card. So you basically are shutting yourself down for twenty one day. You can go shopping, can eat out, can get your hair down, no nails.

It's all of that. And the ideas that you got a charter rebuild what your money means to you because lots of people are spending and it's not where they really, truly want to spend their money. They say they want to say for was safe for the kids college. But when you look at there how they spend, they are eating. Now they're buying cars, they're buying clothes.

So we just wanted like just shut out down, just shut out all the consumer notes and just say, and I this is how I do IT when I close my eyes for the last time, I want to a look back at the money that I aren't and leave a legacy and that won't be cause or clothes or you may even the vacations IT will be that I said, all three of my kids, the college deaths that I tried to my church mean you. I gave ten person of my ink to my church that I saved enough for my return was in a room on my children I gave to my community. So that's what I wanted do. And if you drill that, if you shut down all the consumer messages to buy bye, you can then later focus on what is important to you, then cut out thing else.

you are getting in touch with your values. And IT sounds like you have IT licked. absolutely. Michelle is always such an amazing time talking to you. Thank you so much, and please come back.

I would love to thanks so .

much for joining me today on her money. If you love this episode, please give us a five star review on apple podcast. We always value your feedback. And if you want to keep the financial conversations going, join me for a deeper dive.

Her money has two incredible programs, finance fix, which is an eight week program designed to give you the ultimate money makeover, and investing fix, which is our investing club for women that meets by weekly on zoom. With both programs, we are leveling the playing fields for women's financial confidence and power. I would love to see you there.

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