There are a number of statistics that most people are familiar with when it comes to the severity of the wealth gap in America. For example, the average wealth of white families is 6.7 times greater than the average wealth of black families. According to a recent survey by Credit Sesame, approximately 54% of black Americans say they have no credit or poor to fair credit, which is considered any score below 640. About 41% of Hispanic Americans say they fall into this category as well.
The importance of credit and lack of access to financial education can make people feel like the system is against them. However, paramount to Mickey Factz is his goal of creating tangible insights and projects that will help improve the creditworthiness of his community.
The New York rapper has built his understanding of financial literacy over the past few years. Mickey’s quest for money and meaning eventually led to a partnership with Kiddie Credit, a mobile app that uses household chores to make credit easier to understand for kids.
Now we’ve tapped Mickey for Financial Facts, a four-part weekly series in which he offers personal advice on a variety of money matters. Continuing his talk about budgeting, here’s part two where Mickey doubles up to offer five facts to help you understand and maintain the importance of good credit.
Complex: In your experience, what basis do you need to stay consistent with your budget?
Mickey facts: Credit man. Credit is basically the foundation of everything – and I’m not just talking about having enough to get a credit card and go through with it. Credit is how financial institutions see us as responsible people in society. That’s really all. Credit: “Can I trust you with this amount of money to repay me and make your dreams come true?”
In my opinion, as I have more knowledge of credit cards, I believe that they should be used all the time. To be honest, a debit card shouldn’t be required. Aside from a strip club, most of the time you don’t need any cash. Everyone exchanges money via FinTech, which is like Apple Pay, CashApp, PayPal or cell. This way, you can pay whoever you want and no need to carry cash with you.
What should someone who just deals with credit cards and credit reports consider before taking the plunge?
MF: Credit is the building block for everything when it comes to finance. You can’t get a job sometimes if you have bad credit. You can’t move to a specific neighborhood if you have below par credit. When you have good credit, you can go to a dealership and spend less money on a car with a low interest rate because they understand you know how loans work.
Growing up as a black teenager, credit cards were there for me to fly as my friends told me “cash is king”. Cash is king in certain cases, yes, but credit is the ace or the big wild card because when you are in the financial world, using credit to make your dreams come true is an important key.
How did your partnership with Kiddie Credit come about and what impact has your financial journey had on youth?
MF: Kiddie Kredit contacted me after my freestyle on the Funkmaster Flex show [about financial literacy]. They asked me to become a brand ambassador to teach kids ages 8-13 about building credit. I found this a fascinating idea and decided to be a part of it because as a kid and young teenager I wasn’t taught all of that in school. [Laughs] Instead, we dissected frogs.
Kiddie Credit is a mobile tracking app that uses assignments to educate kids about credit building. If they complete enough tasks, they can show the results to their parents and “increase their credit” to use their pocket money to make financial decisions. But if you just asked things, you’ll learn that even after you’ve got your household chores done, your credit score is the same as it was on your credit report – asking for too many credit cards can damage your credit good.
I. Understand credit:
It is the secret to getting access to money that will help you advance your dreams and give you the opportunity to start your own business.
II. Find out what debts you have:
Healthy debt is important to financial literacy growth and it is very important to learn which healthy debts you can use to increase your bottom line. The bad debt you have gives you some insight into what it takes to clear your books before applying for a home or credit card.
III. Find out about compound interest:
For those who do not know, compound interest simply means earning interest on your savings and, eventually, the interest those savings earn. The sooner you learn and pass this information on to others, the sooner you can earn compound interest yourself.
NS. Prioritize investing:
In my opinion, investing is an educated game of chance, so only put money into the market that you are okay with to lose. Save one to five percent of your money for the month to invest in yourself, and if you’re brave enough, take another $ 100 and bring it to market. You should always have money around in case another GameStop situation arises and you don’t miss out on anything.
V. Avoid fear and accept risks:
It is important and imperative that people plan for the future, and there is no better time to do that than the present. They don’t want you to be thrown out of the game by a surprise or to find yourself in a precarious situation where you are now packing fifty and sixty grocery bags because you did not plan this moment. This is the time to shake off the fear, to accept the risks associated with today’s opportunities, so that you can relax on the beach in old age.
Check back next week for part two of Financial Facts, where Mickey shares wise advice on entrepreneurship. In the meantime, you can revisit Part 1 to learn more about budgeting.