How To Get A PERFECT Credit Score For FREE!
Are you wondering what impacts your credit score? Well in this video, I’m going to explain
everything that goes into what impacts your credit score. How you can improve your credit score
and why is this even important. So over the past decade, I’ve helped build my credit score all
the way up to an 824 credit score out of 850.
Now, this is a very high one, probably one of the highest credit scores that I’ve seen and I’ve done this very strategically, over a long period of time and it’s something that knowing what impacts your credit score.
Once you realize that it’s going to be much easier to build up your credit score and help get it close to the perfect credit score.
Now in this video I’m going to explain all six ranking factors that go into impacting your credit score and we’re getting started right now so, starting off with why you care what your credit score is.
Why does it really matter? Maybe you’ve never even checked what your credit score is until this video and there are some really good ways and it is very important to monitor your credit.
I use two free software which I’ll leave links below in the description but creditkarma.com and mint.com are two great free resources for monitoring your financial income and also your credit score data.
So credit karma is going to be the one where you can find out today for free. What is your credit score is and I highly suggest signing up for that.
The reason you want to know this information is once you have a good credit score you’re going to be able to open new credit cards which are going to come with a lot of great benefits like travel benefits free lounges free travel credit you’re also going to be able to take out loans, so if you’re wanting to start a business buy a house.
All this stuff is going to revolve around your credit and there are so many other things in the financial world that require having a good credit score.
So it’s something that’s important to keep in mind and then lastly around half of America’s social
security numbers were leaked in a huge data breach so monitoring your credit setting up free alerts, so if somebody is opening up credit cards in your name you’re able to take action and get alerted about that and you can do all this stuff with creditkarma.com and it’s the
one of the best free resources out there.
So make sure you go ahead and sign up for free today let’s move into these top six ranking factors that are going to impact your credit score.
Now all these ranking factors have different impacts so starting off with the top three these
are all going to be high impacts on your credit score and they’re going to be some of the most important ones so coming in at number one is the credit usage so let’s say you have two credit cards for example and each one of those credit cards allows you ten thousand dollars of
credit each so in total you have twenty thousand dollars worth of credit available to your name.
So the credit card usage is basically a percentage of how much are you utilizing of that twenty
thousand dollars of credit to your name so let’s say you’re spending around two thousand dollars a month that means you’re going to be utilizing around 10 of your credit and this is a huge ranking factor and a huge impact on your credit score.
One of the ways that a lot of people who don’t have a lot of credit to them are gonna never be able to really build up their score so unless you’re able to really impact or change the amount of credit to you, you can do this in a number of ways by asking for a further credit balance to your name, because even if you’re able to get five thousand dollars in more credit it’s really going to lower your credit usage percentage.
For example, I have around 250 000 worth of credit to my name I’m always paying my cards off on time and even early so my credit utilization score is never really above impacting my credit score negatively and this is a great way to really be conscious of gaining more credit to your name but also lowering one of the biggest impacts on your credit score.
So, it’s something to really make sure you monitor, and if you sign up for credit karma shows you what percentage you’re using and you’ll be able to easily see how much percent of your credit you’re utilizing, so keeping this low and keeping your cards paid off on time or even early is really going to lower this percentage and it’s something that’s very important because it’s one of the highest impacts.
Moving on to the second thing is the payment history and this is going to be what percentage of payments you’ve made on your credit card maybe you’ve missed a few payments so your credit percentage has been off luckily the first thing I do anytime. I open a credit card is a turn on the auto payment and a lot of times what I’ll do is as soon as I have a balance I’ll go ahead and pay that off even if it’s a few weeks early.
That way a lot of times it’s going to lower my credit utilization, I’m going to make sure I’m hitting those payments and if I don’t or if I forget to pay off on my credit cards that auto payment is going to kick in.
Always pay off those credit cards on time and earlier than necessary. This is another big high impact so it’s important to make sure you turn on the auto-pay and make sure you’re staying on top of your payments because this is going to really impact your credit score and doing this over time is going to help build that score up and really make sure that things are improving and this is how you build up to an 824 credit score.
But it’s going to take time so moving to number three this has never really impacted me but this is going to be things like collections tax liens if you’ve ever filed for bankruptcy any sort of civil judgments this is where it’s going to really impact your credit score negatively I’ve been fortunate enough where I’ve never had any factors impacting my credit score so it’s something that’s been really great and I haven’t had any derogatory marks on my credit score.
This is the last high-impact category but some people are not aware of this sometimes they’ll use credit karma and they’ll be shocked to see derogatory marks and that might be what’s holding your credit score back so again I can’t stress it enough.
Make sure you sign up for credit karma and make sure you don’t have any derogatory marks because once you figure out your identity was stolen and you didn’t even know it you can go and work on getting these fixed getting these removed from your credit score.
So moving on to number four is going to be your credit age and this is going to be a medium impact it’s not going to be as high as the previous three we discussed but it’s still going to be fairly impactful and essentially this is going to take all of your credit cards the age of those credit cards and give you an average.
What is the average amount of time you’ve opened a credit card if you open a credit card a year ago and that’s the only one you have your average is going to be a year but if you open one 10 years ago it’ll take the average of those two and it’ll give you that and this is going to be a big impact?
This is why a lot of times I don’t close down credit cards I’ll keep them open to make sure that it doesn’t negatively impact my credit age and the secret here is instead of canceling or closing down these credit cards what I’ll do is I’ll go ahead and I’ll downgrade the card to a no feed card.
So that way it’s not negatively impacting my credit score. I’m getting all the benefits but I’m not having that credit card close down, so moving on to number five this is going to be a low impact. This is going to be your total number of accounts this is going to include your open accounts and your closed accounts and again depending on how many you have, it’ll still impact your credit score.
But it’s going to be a much lower thing so this is again you kind of need to open more credit cards and you can see that with the credit utilization how that’s a high impact but having a lot of credit cards is a low impact so you can kind of see like opening up credit cards is one of those myths that it might have a small impact on your credit score.
But over time if you’re paying off things if you’re keeping that credit utilization percentage low you’re gonna have a much higher credit score and this is one of the ways that I’ve been able to maintain an 824 credit score with an opening around 25 different credit cards and if you want to see videos on that I’ll make sure to leave some links at the end of this video talking about my 25 credit cards and the top five credit cards that I recommend in 2021.
Now moving on to number six the last big impactor on your credit score is going to be hard inquiries and this is going to be anytime that somebody checks your credit maybe you’re taking out a loan or you’re buying a car on and you need to get some financing for that what they’ll do is they’ll run a hard inquiry to make sure and check your credit history, check your credit score and if you do pass their test whatever threshold they have for giving out the loan.
They’ll take that hard inquiry get that information and then approve you or deny you for the loan depending on what situation you’re in again just something to mention that a lot of credit cards utilize a soft score but sometimes they do a hard score so a lot of times you’ll see these pre-approved credit cards and they’ll use a soft pool compared to a hard pool.
These are just soft inquiries versus hardened queries and again the hardened queries are going to have a much bigger impact on your credit score.
But if you’ve been doing this for a long time like myself they’re not as impactful because you have so many other positive factors impacting your credit score that a softball or hard pool here and there isn’t really going to make a huge difference again.
This is the last one, it is a low impact but again it is something to consider especially when you’re getting started off with your credit score journey is making sure that you’re not using any really frequent hard inquiries to your credit score and again making sure your credit score is up to date and making sure that you’re tracking it is going to be something really important.
I use mint and credit karma to really stay on top of my finances and again I’ll leave all those links below if you made it this far I want to talk to you about my travel hacking master class I’ll leave some details below.
If you want to learn more about opening up credit cards, why I’ve opened up more than 25 different credit cards over the years and how that’s helped me earn hundreds of thousands of dollars in free travel.
I’ll leave some details below in the description so again if you made it this far go ahead and smash that like button make sure you leave a comment below and let me know I’m curious if anybody in my audience has a higher credit score let me know what your credit score is and if you beat an 824 I might have a free gift for you so make sure you leave a comment below and if you haven’t subscribed yet make sure to hit the subscribe button thank you so much and have a wonderful rest of your day.
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More About This Topic:
So it’s something that’s important to keep in mind and then lastly around half of America’s social security numbers were leaked in a huge data breach so monitoring your credit setting up free alerts, so if somebody is opening up credit cards in your name you’re able to take action and get alerted about that and you can do all this stuff with creditkarma.com and it’s the one of the best free resources out there.
So, Credit Karma is an app that allows you to find out your credit score and offers resources so you can fix any errors on your report. I highly suggest signing up for the free account so you can find out your credit score today!