What To Do To Get A Good Credit Score – the Best Tips For Choosing The Best Company
Your credit score basically shows lenders, banks and other financial institutions how well you handle your money. Having a good credit score allows you to save a lot of money because you will get a lower interest rate if you want to get a loan. This video can help make and save you a couple thousands down the road.
Before you begin, you Need a secured Credit Card – I started with Capital One Secured
Sign up here: https://capital.one/2SkAmsn
You can give as low as $49 and thats basically like a security deposit that they use and they will give it to you in return as revolving credit
DiscoverIt – Minimum $200 and they do the same as capital one and will give you an equivalent to how much of a deposit you give.
Gives rewards – 2% cash back at gas stations and restaurants on up to $1,000 in purchases each quarter, plus earn unlimited cash back on all other purchases automatically
Plus matched cash back for first year so technically for first year its 4% cash back and 2% cash back.
Now that you have a credit card… what do you do with it to increase your credit score fast and as easy as possible? I like to think of your credit score as your grade in a class, in the beginning of the semester it is essential to understand the grade breakdown so you know how to get the best grade possible.
There are 5 things that make up your credit score aka your grade in this instance.
1. On time payment history is 35%
Set up autopay!
Pay off your bill in full every single month , so you never owe any interest on any of your purchases. all you need to do is put a few of your normal expenses on the card each month…and then pay it off in full.
The way this specific score is calculated is on time payments/ total payments.
For it to count as on time payment all you need is the minimum , so even if you can’t afford to pay off the credit card in full at least do the minimum so it doesnt affect your score
If you do make a mistake however you can call them only on your first month to apologize
2, Credit Utilization is 30% of your score
With this you only want to use a small percentage of what your credit card offers, you don’t want to seem like you are relying too fully on the credit. Basically saying you don’t need all the money they’re giving you because you are just that smart with money. You really only want to spend 10% of your limit every month.
Don’t keep a balance on your credit card, pay off your balance every month, to keep credit utilization low.
3. Length of credit history 15%
Longer you have credit for, better. I reccomend everyone to start when they are 18 just to have some sort of foundation. Open as many as you can in the beginning
they take an average
4.Total amount of credit lines – 10% of your score
First, the more credit lines you have – the higher your credit limit – which lowers your overall utilization, and helps your score.
Personally I have 7 credit cards and have about 40,000 available to me however I never use any more than 4,000 a month
Second, by having MORE credit available to you, you’re able to show even MORE on-time payments – which, again, will help increase your score.
5. NUMBER OF CREDIT INQUIRIES – 10%
Anytime you go and apply for credit, it’s reported to the credit bureaus and shows up on your report as a “hard inquiry.” This helps lenders keep track of how many times you’re going and asking for credit…and generally speaking, the more often you’re out there asking
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