When it comes to debt, Americans seem to be floundering in a red sea, with little hope of finding land.
There are hundreds of millions of people in America, and 79% of them have errors in their credit reports. The bureaus are so big and so careless they make a ton of mistakes, and those imaginary negative marks have a very real and painful effect on the credit holders.
At the time of writing, consumer debt is around $4 trillion. Of which, approximately 75 percent is non-revolving debt (mostly auto loans and education) and the remaining 25 percent is revolving debt (credit cards).
Having debt has become relatively normal, as most people will find themselves in some form of debt at some point in their lives. However, problems can quickly occur when a debt can’t be repaid and interest fees start to snowball, negatively impacting your credit score. Some of the side effects of bad credit are:
- Higher interest rates on new loans, which worsens the problem further
- Rejections from jobs (certain positions require a good credit history)
- Inability to get a phone contract or apartment
- Higher insurance premiums
- Stress and other emotional/mental ramifications
With all of the problems that bad credit and debt can create, you wouldn't be naive to think that credit bureaus and banks would want to help us out get out of the red and into the black. Surely they care about our financial prosperity? Unfortunately, that’s not quite the case.
Read on to find out how the current system works and who will be trailblazing the way to a credit revolution.
The Old Way: How Banks and Bureaus Approach Debt
You might think that banks and credit bureaus operate with your best interests at heart. However, when you begin to peel back the layers of how banks are profitable, it can feel like a betrayal.
For banks and credit bureaus to survive, they need to make money.
The primary function of a bank is to accept deposits and grant loans and advances; they gain profit by lending money at higher rates than the cost of the money they lend.
The primary function of a credit bureau is to ensure that creditors have the information they need to make a lending decision; they gain profit by selling your credit information (i.e. your credit score and history) to you and lenders.
When you think about how banks and credit bureaus make money, you can’t help but ask yourself: why? Why do they make billions of dollars every year by selling your information back to you? And why do they sell your information to lenders and banks in the first place? There are two main reasons:
- First, they know that people who are in debt or have a low credit score and want to improve their financial circumstances will pay money for their credit information if they feel they have to – even though people can access their credit reports once a year for free
- Second, they know that banks and lenders make more money the more money you borrow. So, they sell your information to the lenders who want to market their products to you and the vicious cycle designed to keep you in debt is created
In the 1930s, government surveyors categorized neighborhoods based upon how risky they thought lending credit to them would be. Areas outlined in red were believed to be hazardous and were mostly formed of African Americans and minorities. People in these neighborhoods found that loans were unavailable or expensive simply because they weren’t northern-European white!
Although this practice, known as “redlining,” was banned 50 years ago, 75 percent of redlined communities still continue to struggle economically. It seems that making credit less available and more expensive for those who are struggling just isn’t working.
The sad truth is, credit lenders and banks don’t operate with your best interests at heart. Their ability to prosper is dependent upon your ability to remain in debt.
The old system is an imminent shipwreck.
The New Way: How Credit Heroes Approach Debt
Banks and bureaus were able to seize control of the credit system in the past because no viable alternatives existed. But in the words of Bob Dylan “the times. they are a-changin’” and a new approach has emerged.
“And there's no tellin' who
That it's namin'.
For the loser now
Will be later to win
For the times they are a-changin'.” – Bob Dylan
The new approach is breaking credit taboos and taking power from the banks and bureaus and placing it back in the hands of the people. The new approach is being led by credit heroes – people who have started credit repair businesses that thrive by working around the old broken system, instead of drowning as they try to work inside it.
Credit heroes make money by improving the financial situation of others, unlike the banks and bureaus who profit from financial disempowerment. Credit heroes swoop in to get people out of the debt cycle with better credit, and coach clients on how to protect themselves from debt in the future.
Credit bureaus make mistakes that can send a person’s life into a tailspin.
Collections agents who buy old debt for pennies on the dollar also hurt and harass people and ––often –– break many laws.
Predatory auto lending practices in the poorer communities lead to repossessions and more financial hardship.
And credit heroes fight all of that.
Credit heroes work directly with clients to create a unique credit repair game plan based on their goals and values. Credit heroes write dispute letters that actually work. Credit heroes step in when people are feeling helplessly stuck in debt and poor credit with a proven plan to stay afloat financially. That is how credit heroes change lives.
Are You a Future Credit Hero?
Credit heroes come in all shapes in sizes, from all walks of life, yet they all have the same mission: to transform the lives of others through financial empowerment. You’ll know if starting a credit repair business is your life-calling if you want:
- To contribute to something greater than yourself
- Financial freedom
- To be your own boss
- Variety and flexibility in your day-to-day life (every day is different for credit repair business owners)
- Personal, spiritual, and emotional growth
Do you want to change lives and start a profitable credit repair business? Join our live training today to get started.