Credit - How to Make it Work For You

In this episode of A + You, hosts Danielle and Amber sit down with Brad Edwards, a Senior Phone Lender with nearly 20 years at Affinity Plus Federal Credit Union. Brad brings his deep experience in consumer lending to break down one of the most confusing—and often intimidating—topics in personal finance: credit scores.

Brad explains why credit should be viewed as a journey, not a label of “good” or “bad.” He shares the key factors that make up a credit score—like payment history, credit utilization, and length of credit history—and offers clear, practical advice for building and maintaining strong credit. Listeners will learn why on‑time payments matter, how credit card usage affects scoring, and ways young people can begin establishing credit responsibly.

The conversation also tackles real-life challenges: missed payments, emotional spending, and managing debt. Brad provides helpful guidance on using automatic payments, creating a realistic spending plan, and borrowing intentionally rather than impulsively. The hosts also highlight Affinity Plus tools like credit monitoring through the mobile app and resources available for financial coaching.

Whether you’re starting your credit journey or looking to improve your financial habits, this episode offers approachable, judgment-free insights to help you make credit work for you—not the other way around.

Affinity Plus Federal Credit Union - federally insured by the NCUA

Transcript

SPEAKER_03 0:00

Hello and welcome back to the A plus U podcast. I'm your host, Danielle. And I'm your co-host, Amber. Wow, I was sleeping on that one. Amber is here today.

SPEAKER_02 0:10

Amber, tell us what you did last weekend. I may have gone car shopping. Some people love that. Some people hate that. I loved it because I have heat in my vehicle now. Um you went the whole winter without heat? Yeah, let's not talk about that.

SPEAKER_03 0:27

You just dress warm, wear mittens. That sounds chilly. Yeah. Um well, that's exciting. Did you get like did you get a like a new big car or a small little car?

SPEAKER_02 0:38

Like an SUV. Like I had a Jeep Grand Cherokee and now I have a Honda Pilot. So it's it's nice. I like it. Extra room. Extra room, but also sits high enough to see over traffic. Do you know what?

SPEAKER_03 0:51

I understand that intimate. My husband has a smaller SUV, and it's one where like um the numbers are like on the like they come up on the heads up display. Yeah, yeah. Really like that. Even in so in his car, even if I'm all the way like raised, I still cannot see it.

SPEAKER_02 1:13

Well, I don't have that problem. I see the heads up displaying.

SPEAKER_03 1:17

It's so funny. Yeah. And I think you're taller than I am. Yeah. Well, car shopping, springtime. I think that's a great uh segue to introduce our guest.

SPEAKER_02 1:29

Absolutely. I know our guest talks a lot about um auto lending and other items and his role. Brad, can you introduce yourself for us?

SPEAKER_05 1:39

You bet. Uh, my name's Brad Edwards, and I'm a senior phone lender. I work with our Bemidji team and take phone calls, talk to our members over the phone.

SPEAKER_02 1:50

In primarily lending.

SPEAKER_05 1:52

Lending, yes, consumer lending. So pretty much anything except for mortgages.

SPEAKER_02 1:56

Absolutely. But also, you have some of your regular members. You've been here a long time, and they still call you not about lending.

SPEAKER_05 2:03

Right, exactly.

SPEAKER_02 2:04

How long have you been with Affinity Plus now?

SPEAKER_05 2:06

It's been 19 years now.

SPEAKER_02 2:07

Oh my goodness. I was definitely on like the 17-year thought process.

SPEAKER_05 2:11

That's what I was thinking too till I saw it. I actually thought it was 18. No, I looked up. Oh, actually, it's 19, I think.

SPEAKER_03 2:18

So gosh, that's amazing. Uh that's quite the tenure. That's more than Amber. It is more than Amber.

SPEAKER_05 2:24

Barely, but yeah.

SPEAKER_03 2:27

Have you always been in Bemidji?

SPEAKER_05 2:29

Well, you know, I actually live in Grand Rapids, but I work with our Bemidji team because that's where our phone lenders. We're actually spread out over the state. So um we'll go there, you know, one week a quarter. Matter of fact, we have that coming up in February. It's always fun to get together with the team, but mostly I just work from home. So I've always been in Grand Rapids, except for a little four-month stint to Arizona. And that's a lawn store. That's another podcast, I think.

SPEAKER_02 2:54

You had to get away for the winter. That's it.

SPEAKER_05 2:56

I thought so. Yeah. But 113, I'm like, I think I can handle a little winter.

SPEAKER_02 3:01

So I don't know.

SPEAKER_05 3:02

We did get to negative, like, yeah, I was thinking about that the other day actually. I was doing a loan for a member and they were like, uh, just kind of rubbing it in a little bit, you know, 70 down here.

SPEAKER_03 3:13

Hey, that's okay. You know what? Life is all about experiences.

SPEAKER_05 3:16

Right.

SPEAKER_03 3:17

And and our finances are no different. Exactly. Right? Right. So um today, you know, we are gonna kind of hone in on the topic of kind of credit. And what is what what is a credit score? How can you make a credit score work for you?

SPEAKER_05 3:34

Right.

SPEAKER_03 3:35

I assume you have that conversation daily.

SPEAKER_05 3:37

Yes, all the time, multiple times a day.

SPEAKER_03 3:41

Um, so I guess um, just to kind of get us starting on the conversation of credit, a lot of people are afraid of what credit is. A lot of people when you think about credit, you think about, oh no, you know, what is this? When is it? How do I use it? So can you just talk a little bit about, you know, when people come to you with concerns about credit, how can you ease their their concerns and I guess what are their concerns?

SPEAKER_05 4:05

Yeah, I th I think the biggest question you get right away is will I qualify for this loan? What is my credit score? Is it good? Is it bad? Um, where am I at? Um, will my score be high enough? Um, will I qualify for that loan with that credit score? So kind of try to talk them through that and kind of realize that um, you know, there is there's really no such thing as good or bad credit. It's kind of a journey. You'll never reach perfection on your credit, so it it's definitely a you know a work in progress for all of us, actually.

SPEAKER_03 4:36

I like that perspective that it's not like good or bad, it's a journey.

SPEAKER_05 4:40

Right.

SPEAKER_03 4:41

And some people do hit perfect though.

SPEAKER_05 4:43

Yeah, once in a while you have that 850.

SPEAKER_02 4:46

I was like, maybe in my career I've seen it twice.

SPEAKER_05 4:50

I was gonna say, I was trying to think of how many loans I've done. I don't know, maybe 20,000, 30,000 or something. And it's like I've probably seen five or six 850s.

SPEAKER_02 4:59

Really?

SPEAKER_05 4:59

And that's like someone who's had a mortgage or like for 30 years and auto loans and established. Sometimes you can't even get that high, but that is definitely when we we're like, hey, put this on the refrigerator when they get point.

SPEAKER_03 5:11

Yes, that's a solid report card.

SPEAKER_05 5:13

Exactly.

SPEAKER_03 5:14

Wow. Well, that's impressive. So maybe let's take a step back just a little bit. And you know, a credit score is kind of a a sh a snapshot of your habits, kind of like what you just said in terms of you know how to get that perfect credit score. But it's not, it doesn't necessarily define you as a person.

SPEAKER_05 5:33

Right, exactly. Yep. It doesn't mean that uh you're a bad person or anything if your score is low. It's just you you may have some work to do and maybe partner with us and we can help you with that.

SPEAKER_02 5:44

So then when you think about um what goes into a credit score, can you kind of walk us through that so it's easier to understand? Because it's not just a score right here, right now.

SPEAKER_05 5:55

Right, exactly. It is it is about a journey, it is progress. Um, there are some factors that go into a credit score. Um, a big part of it, actually, they say 35% of it is your on-time payments. Are you making your payment on time? It's very important to try to do that. If you are struggling, reach out to us um and do your best to not make it hit 30 days. If you hit 30 days, that is a late payment on your credit, and that will take a while to get off of your credit. Um, so do your best making your payments. That's a real important, you know, one-third of your scoring is based on that.

SPEAKER_02 6:27

When you say hit 30 days, your payments do, yes.

SPEAKER_05 6:31

Okay late. So try to make it on time. We do have a grace period, most of our loans 15 days without a penalty, but at the very least, even if you're getting that late fee, try to make an arrangement so we can pay it or reach out to us before so we can help you with that. So that's your biggest way. Um, second is actually your utilization, and that's mostly based on like credit cards, revolving debt, lines of credit, things like that. Um, so a good rule of thumb is you want to try to not use more than 25 to 30 percent of your available limit or balance um limit, actually. Um so for easy math, let's say you have a$1,000 credit card limit. Try your best not to carry over$250 to$300,$350 on a consistent basis. It might happen, it might go a little higher at times, but try to keep that down if you can, even pay it off if you can each month is great, but at the very least, try not to max it out, and that can really help people's credit a lot. Now, if they start hitting over 50% or maxing out the card, um that can really hurt. And even going over the limit, and credit cards don't always stop right at that thousand dollars or that limit. Um, you have interest that will post each month, so then all of a sudden you're over the limit, and that really is derogatory on your credit.

SPEAKER_02 7:48

Yeah, and that interest is only gonna post if you didn't make your payments, if you didn't pay off the credit card in full.

SPEAKER_05 7:54

Exactly. Yep, otherwise you have that grace period on like our our cards and most credit cards. Um, and one more factor I can think of is your length of credit history. You know, sometimes you don't have a choice, you gotta start somewhere. Some people don't have any credit, some people have paid cash all their life. But we can we can help you start. Maybe it's a small credit card, small line of credit. We even have a credit builder loan or a loan where we supply the money, you put it and you pay a little bit of interest on that, and then that money is available to you after. So there's some ways that you can get that credit history going, but it does take time. But hey, we're here to partner with you and start on that journey with you.

SPEAKER_03 8:29

Look at that length of credit history for just a second, because I think that's a good point for you know, people trying to understand like my kids. Like I have kids. So, you know, thinking through like if I have a teenager or something like that, what is a good way to uh help children or help people that are maybe younger who don't have credit get that credit? Is that credit builder loan the right way to go when they're that young, or is it something else?

SPEAKER_05 8:56

Yeah, probably not that so much because um you can't do a loan on your own until you're 18. However, you could be a co-signer or co-borrower on the loan. Um, and we tend to tend to ask you to be 16 to do that. However, you can make any any age of your children an authorized user on your credit cards. I did that for my kids. I had learned that, you know, from working here, and they actually did have a credit score when they turned 18. They had some history. So even though they're not responsible for the debt, so to speak, they actually are building credit as long as you're making good on-time payments and handling that credit card well. Um, but once they turn 18, a lot of a lot of uh members will reach out, whether they still need a co-signer or co-borrower, sometimes they do, but sometimes they can do that small credit card, that small line of credit on their own. And most people will qualify for a$500 to a thousand dollar loan credit card as long as they do have income coming in.

SPEAKER_02 9:51

Okay. So I know we talked about this a little bit just on the on-time payments side of things. So what happens like I totally forgot about this payment that was due, and now I have a late payment reporting on my credit. Is that just going to like hurt me forever more? Or what would you ex what would you say is the best way to get away from that?

SPEAKER_05 10:14

Yeah, you just have to give it time. Don't let it snowball. Try to move on, try to start making them on time. It will stay on your credit report for some time, but the further away you get from that late payment, the lesser it'll affect your score. And try to put try to have positive credit going in addition, and that'll help. So it may lower you 10, 20 points or so, depending on how much how many other trade lines you have, how much other credit you have. But it is important to just move on and do the best. What's done is done, and unless it was a mistake or something on our part or another um lender's part, then you want to try to dispute that, try to get that corrected. But if it is your mistake or it is something late, then you're just gonna have to live with that. But move on, try to try to get that positive credit going.

SPEAKER_02 10:59

So Danielle Brad has told me not to dwell on it. Thought it happened. Don't dwell on it. That that is the key.

SPEAKER_03 11:07

I mean, it's just kind of one of those things. You like you said, you can't change it.

SPEAKER_05 11:11

It's happened to probably all of us, you know.

SPEAKER_02 11:14

Mm-hmm. Absolutely.

SPEAKER_05 11:15

Right.

SPEAKER_02 11:16

There's a lot going on to keep track of, and sometimes it is. Sometimes that bill falls through.

SPEAKER_05 11:21

I was paying for uh Amazon Prime 2 accounts for about a year and finally realized it. So like, wait a minute here.

SPEAKER_02 11:30

It happened to the best of us. We talked about mean watching what is it, keeping an eye on your streaming services and things like that.

SPEAKER_05 11:37

That's a big one though.

SPEAKER_02 11:38

Uh-huh. Because you thought you canceled it after that free trial, but you sure did. And you might have actually, but you just forgot to hit okay. Right. So, Brad, I know we just talked about maintaining your streaming services and keeping an eye on those things. So spending happens anyway.

SPEAKER_01 11:58

Right.

SPEAKER_02 11:58

What is the difference between like, or can you share what the difference is, like whether credit is helping you or hurting you?

SPEAKER_05 12:04

Right. I think you know, you we all have to have credit. There's very few people that have no debt at all or can just slap down 30 or 40,000 for a new car or more or a house.

SPEAKER_02 12:15

Yeah, did you pay cash, Amber? Oh gosh, no.

SPEAKER_05 12:17

Yeah, I mean, I would not be able to make it down here if I didn't have a car alone. Yeah, drive three hours.

SPEAKER_02 12:23

So um I appreciate my credit union. Absolutely.

SPEAKER_05 12:26

So it you know, most people, and if you if you weighed your whole life, I mean, would you ever have a house? By the time you had the money, it'd probably be too expensive. So I mean, you gotta think of it that way. So we do have credit, we do spend money. Um, it's important, but really where where I've seen some members get in trouble is maybe when they um have the emotional spending, like, oh, I just saw this snowmobile, or I just wanted my son to have this four-wheel, you know, four-wheeler or something, or we had to have the boat, and you haven't really thought it through. Um, and we like to spend. I mean, like, I love coming down to Minneapolis, and after this, I'm gonna go to Sierra because we don't have a Sierra, you know, and like I love getting you know camping stuff or my even clothes there. These boots are from Sierra, so you know, I so it's like, but do you have a plan? You know, how long are you gonna be paying on that debt? If you if you if you stop and think about it, if I go on this trip and I charge it and I'm not thinking about it, um, how do I, you know, when do I want to pay this off? Is it gonna take me a year? Is it gonna take me two years? And that kind of gets into making just your minimum payments. Let's say you do use your credit card for something and you've planned it out and you think, you know, I'm gonna just make the minimum payment. How long are you gonna pay? Matter of fact, a few years ago they passed a law that you have to put on the statements, the credit card statements, how long it will take if you make a minimum payment. So you've probably seen that. It will say, this will take you five years, ten years, twelve years if you only make the minimum payment. And that's without putting money back on the card. Um, so think to yourself, okay, how long am it is it gonna take to pay this$5,000 back? Do I want to pay it back in 18 months? Well then I should pay$600 a month or$300 a month. Um and you can call us and ask us and say, hey, can you amortize this for me? How long will it take me to pay this back? And then trying to be as disciplined as you can and not just make that minimum payment. Otherwise, I mean you will pay for that trip maybe three, four times over.

SPEAKER_03 14:18

And that's specific, you're speaking to like maybe like a credit card.

SPEAKER_05 14:20

Credit card, yes, exactly. Yeah. Or if you take out some, we do have a holiday loan that people sometimes use, and um, that is amortized over only 10 months, which is nice. So you do have to make a little bit bigger of a payment and it will be gone. You know, your payment might be if you use the whole$2,500, it might be$260,$265, but you're making that payment each month. Whereas a credit card, if you're only making that minimum, again, you could pay for years and years.

SPEAKER_02 14:48

And so talking like the difference there would be the fixed loan, which is like a holiday loan or an unsecured loan that we offer at Affinity Plus, or um the credit cards, like you're saying, where it's the minimum payment, which is generally a percentage of a balance owed that is required to be paid each month.

SPEAKER_05 15:06

Exactly. And the lower your interest, the better. You know, you can make better progress and have a less of a payment, hopefully.

SPEAKER_03 15:13

Yeah. Okay, so we're talking about, you know, credit and we're talking about credit scores. So I have a friend who she does talk about a credit score a lot, and it is something that I feel like she is just like very on top of. But I guess in my humble opinion, credit should serve you, not like should serve your life, not run your life.

SPEAKER_05 15:37

Right.

SPEAKER_03 15:37

What's your take on that, Brad?

SPEAKER_05 15:38

Oh yeah, I agree. It it's like we said, probably not gonna be perfection. It's not a race to get to that perfect score. Um, it's about maintaining it. If anything, it might be a marathon or whatever, but um, yeah, just trying to maintain that and having thinking your credit more as something that a tool that allows you to you know meet your goals, to buy things you need or you want.

SPEAKER_03 16:02

What are some other habits that you can speak to um for someone who I mean, I know we've talked about you know making your payment on time, but are there any other things that someone can do just like in their daily life or somewhere to start to help have their credit help them?

SPEAKER_05 16:19

I think automatic payments is probably my biggest recommendation. I've seen that for myself helping. And if you have that automatic payment that comes out before you, you know it's out, you know you're not gonna have to worry, or you're gonna say, oh no, I'm in my grace period, I forgot about this payment. If it comes out automatically, it's out. And even looking at a bi-weekly payment, most most people are paid bi-weekly. So if you say you have a$1,000 loan payment, and if you paid$500 every time you're paid, not only will you make one more extra payment per year, but it'll help pay down that debt, pay down the interest. Plus, it's actually feels easier to make that you know payment twice in one month a smaller amount than trying to come up with the big amount. So you might be taking a little of this check and a little of this check instead of all of it out of that check. So I think that that really helps. Um, and then also having a budget. I know some people don't like that word budget, but so we're like, well, maybe you want to call it a spending plan, because you know you're gonna spend money anyway. But it doesn't matter. I've seen people who have a lot of income and they still um struggle because they don't have any kind of spending plan, any kind of budget. So no matter who we are, we have to have that budget. Um, and kind of see, you know, just even sitting down, I try to do that at least every couple months, sit down and say, how much is actually coming from my check after taxes, insurance, how much are my expenses each month, how much are my loans, and just see kind of where you can make some changes. And maybe it is getting rid of a couple streaming services or doing something else, or maybe you realize you can afford a little bit more. So um being careful, and then we talked a little bit about the intentional borrowing too before. Um, if you're just driving down the road and you don't know your your heat's not out on your car, and you know that you you need a new car, or you don't you don't know you don't need a new car, and you're just like, oh man, but I'd like this car, it looks really cool. You know, I've always wanted one or something. Um, try to plan ahead because I've had people on a Monday morning call and say, Oh, I did a loan with a dealer, but I realize this truck can't even pull my boat or camper, and then they're stuck, and then now you have negative equity and you're trying to get rid of that, puts you behind the eight ball. So just being intentional. Plan. What do you want that payment to be? How long do you want to pay it for?

SPEAKER_02 18:39

I think all of those are great um methods. I think just a spending plan and knowing what comes in every month and what's going to go out every month makes such a difference. And whether you're sitting down to do that every couple months, every month, whatever it may look like for each like individual person is beyond helpful because you you could really have a lot more going out than what you realize if you don't keep track of it.

SPEAKER_05 19:02

Right. I mean, I just did that last month. I'm like, wow, we do have a lot going out. I mean, we're okay in our position, but there is there's some things that I could cut out for sure.

SPEAKER_02 19:11

Yeah. And it's it's a personal choice though, too, because like we may have a lot going on, and it's like, well, I enjoy my lifestyle today and it works for me.

SPEAKER_05 19:20

Exactly.

SPEAKER_03 19:21

Mm-hmm. So as we think about you know monitoring your credit score and understanding what that is, uh, Brad, what are some resources or where can people go find what their credit score is?

SPEAKER_05 19:33

Yeah, well, it's really nice right now because we've had savvy money on the website on through the app where you can actually get your credit score, but it is the exact credit score that we pull now. It's TransUnion Vantage 4. There's different models, different bureaus, but we pull from transunion vantage 4, and you can actually get that um credit score. So that really will help you to see what your rate's going to be even before you apply for the loan. Then if you do qualify, you at least know kind of what your payment will be. Um and there's so many tools on the on our um webs on the website at um affinityplus.org and through the app, budgeting tools. We're releasing some new ones. They're really, really good for financial planning.

SPEAKER_03 20:14

Okay, and Brad, you mentioned that the credit score is in the the digital banking app here at Affinity Plus. Um, but that's not considered a hard pull. And can you kind of talk can you kind of talk to a hard pull or what that is, what that means?

SPEAKER_05 20:26

Right. That that credit score that we have available each month, um, that updates each month, that is your actual score, but it is just a snapshot. Your credit is pulled, and they call that a hard pull, whenever you apply for a new credit. So whether it's a new loan, car loan, auto loan, um, any kind of credit card, we will pull your credit from TransUnion. If you go to a car dealership, they sometimes will shop around, and we've seen six, seven, eight credit pulls in the same day. It's not as bad in the in the same day, you know, or within a two-week period. However, those are credit polls, so you want to be careful of that. And the credit bureaus, when you are shopping and you do have your credit pulled or take out a new loan, they will lower your score a couple points. It all depends on how much other credit you have, but that is something to you know take into consideration. You don't want to be shopping around too much and have your credit pulled too much.

SPEAKER_03 21:17

Because, like you said, every kind of pull is a is a point or two.

SPEAKER_05 21:22

Right.

SPEAKER_03 21:22

So in the overall grand scheme of things, not horrible, but if you're doing it over and over and over, that is something that's gonna be.

SPEAKER_05 21:29

It's something you have to do if you're gonna take out a loan. A lot of people call, they're very conscious of that. I don't want my credit pulled. We'll try to kind of give them an idea. Now that we know, you know, maybe what their score is, you know, I can quote them a rate and be pretty confident as long as they qualify for it. And then if they do want their credit actually pulled, we put that application in and we can use that credit pull for up to 30 days for any loan they do. Whether their car changes to a different kind or they want a motorcycle or a boat instead, we can get that. Yeah. Or a credit card. Or premier select credit card.

SPEAKER_02 22:03

So Brad, we've talked about a lot today. But when you think about like if someone remembers one thing from today's conversation, what should it be?

SPEAKER_05 22:11

I think that credit is a journey. It's not something, it's not a race. You're not gonna ever be done with it. So, you know, just embrace that journey, let credit work for you.

SPEAKER_02 22:22

Oh, that's good. That was really it was inspirational. I loved it.

SPEAKER_05 22:28

Awesome.

SPEAKER_02 22:28

And it's a good reminder. I think that's the piece to just keep in mind is that credit is never stagnant. It's always something that is ever evolving over time.

SPEAKER_03 22:38

Well, and I mean, again, if you're in a sticky credit situation right now, that doesn't have to be the case in a year. Right. Right. Right. And that's where that's where, you know, we have resources that can help you. Mm-hmm.

SPEAKER_04 22:53

Yes, we have our financial coaches and the website.

SPEAKER_03 22:57

Mm-hmm. Yeah, there's lots of resources available. Um, so what what is today does not have to be tomorrow. That's right. Right.

SPEAKER_04 23:04

That's right.

SPEAKER_03 23:05

Well, Brad, thank you so much for driving on down and hanging out with Amber and I today. Um, your your wealth of knowledge is is very welcome.

SPEAKER_05 23:16

So Well, thank you. Really appreciate it. It was a lot of fun.

SPEAKER_03 23:19

Yeah, we can't wait to have you back if you'll have us back. Absolutely.

SPEAKER_05 23:22

I'd love to.

SPEAKER_03 23:24

Awesome. Well, make sure you listen and subscribe wherever you get your podcasts and check out affinitypl.org for more information about Affinity Plus. And we'll catch you on the next episode of AU.