How to Build Personal Credit Fast with no credit | Credit score basics | Secured credit cards

hey guys my name is kelvin mcneill and welcome to my channel where we discuss financial wellness mindset therapy and real estate today's video is going to be all about building credit so whether you have bad credit no credit or new credit today's video is going to be just for you [Music] guys if we haven't learned anything in the year 2020 we know that we have to be prepared we got to stay strapped financially strapped the first thing i want you guys to understand is that if you have bad credit don't beat yourself up it's only temporary i tell my clients this all the time it doesn't matter how low your score is the only thing that you need to do is just learn and understand how your credit is scored based on the different algorithms like vantage and fico then take necessary steps to begin repairing your credit and building uh positive uh trade lines and positive accounts that will replace the negative items that you need removed if you have no credit you need to begin building credit and i'm gonna give you guys the top five things you need to know in order to get your credit on track or to begin building credit credit score basics that's what i like to call this credit score basis so how can you build credit or repair your own credit if you don't really understand how your score is being calculated there's going to be five categories or five factors whether it be a high impact low impact or medium impact that's gonna you know that the credit bureaus are gonna judge your score based on the number one thing is gonna be payment history so payment history is actually 35 of your entire score so the worst thing that you can do is miss a payment and this could be for a loan or a credit card listen you can have a 700 credit score and with exceptional payment history but the moment you have one new payment show up on your or one new missed payment show up on your credit report your score can go down by 50 points or more if i know i'm gonna be about you know a few days a few weeks late on making my payment just schedule a future payment when the creditor or your bank sees that you actually intend to make a payment they are far less likely to report to the credit bureaus that you were 32 days late so that's the number one thing you want to do pick up the phone and give them a call let them know that you'd like to schedule a payment because again this is the highest impact the largest slice of the pie 35 of your score is payment history the second thing 30 of your score is going to be credit card utilization if you have any credit cards the number one thing you want to try to remember is keep your balance low and pay early if not on time one rule of thumb is try to keep your balance below 30 if you go above 30 percent they begin to you know hit you in the rib and you know give you some points taken away from your scores so you want to try to avoid going above 30 usage at all times so for the people who may have high credit card utilization but you have exceptional payment history that's the one thing that may be holding you back so if you can make some extra payments on those credit cards i'm pretty sure your score will go up so the next thing is age of credit this is 15 of your score so age of credit just essentially means that they're going to take the oldest account that you have the oldest open account and they're going to look at the newest account and then basically judge what is the median between those two if you have an old account that you were thinking about closing that old card you know the credit card that you haven't used in the year keep that puppy open because that's probably the account that's keeping your credit where it is right now instead of going down to the dumps so the older your accounts are the better your score let's say you have your your scores are over 700 and you can't figure out why you can't get up into the 800 club most likely it may be your average age of credit is too new so only tom can fix that just stay patient and your scores will go above 800 once you hit a certain threshold the next two items are going to be low and i'm talking 10 each one thing is going to be credit inquiries so credit inquiries increase however you want to say it is 10 of your score these credit inquiries don't really have you know obviously much of an impact but if you have too many of them and they begin to stack up it could be one you know thing leading you to a decline if you're applying for a new line of credit for example here at gsc funding you know we have a lot of clients that may come to us and try and get a hundred or two hundred thousand dollars but if you have uh six inquiries within the last uh 60 days that alone could get you a denial so you want to try to dispute those inquiries and try to avoid um you know any hard pulls because hard pulls do show up in your credit report and then last but not least ten percent of your credit um scores are going to be judged on your mix of credit mix of credit is gonna be essentially uh your balances between what how many revolving lines of credit you have versus how many installment lines of credit you have number two thing that you want to know is hey you need to start building revolving lines of credit revolving lines of credit could be a line of credit that you've received from a bank a line of credit that you may have received from a department store or a physical credit card which is the most popular type of revolving credit now there are many different ways you can you know build credit using revolving credit i'm gonna give you my top five that you can use secured credit cards are the best option for anyone who has really bad credit or no credit history at all because you're not going to be able to you know unfortunately you're not going to be able to just go right to you know amex and apply for your first credit card you can give yourself a boost each month and you can literally see from month to month your score going up like the stock market so the number one secured credit card that i would recommend is called the credit builder card the credit builder card was literally created for people like you in mind people who either have low credit scores or no credit so they're trying to build credit it's a secure credit card that you would get you make a 200 deposit they're going to mail you a credit card with that same 200 that you used as your deposit that 200 would then be your line of credit on that credit card here's the key this can really help you or it can really hurt you all you have to do is think this is not a credit card that i'm going to be using uh to go shopping this is literally a card that i'm going to use as a tool to build credit and to increase my credit uh scores you're gonna make one small purchase each month it can be one two three as long as you don't go above the thirty percent threshold which will be sixty dollars so don't spend over 60 and then pay off the amount early if you do this each month your credit score is going to rise and you're going to just see uh the wonderful you know benefits of having the revolving lines of credit when you didn't before i would recommend to have at least three revolving lines of credit building four preferably if you can uh and you know i would say six months down the line you'll be in tip-top shape the second one that i would recommend we're still talking secure credit cards is actually a new one and it's if you have iphones unfortunately uh android users is not available for you guys yet but it's called the grain app i'm going to go ahead and plug that up right here so the grain app is actually a digital credit card i really haven't seen uh anything else like this although i'm sure it may be other options out there similar to what grant has to offer all you're going to have to do is link your most active checking account if you bank with wells fargo and that's where you get your paychecks deposited to you're going to want to sign in and link your uh you know whatever your personal checking account is but they're just going to do a quick scan and see you know if you have cash flow do you have money coming into this account regularly based on that they're going to give you a minimum of one thousand dollars or more um as your line of credit when you withdraw fifty dollars that fifty dollars shows up directly into your account and it's just like you went to you know chick-fil-a or the mall or whatever and you swiped your car for fifty dollars so you're gonna need to pay that back uh before the due date and that alone is going to help your score uh go up and then if you do it right in a few months they should automatically raise your credit limit as well next up i have three more options for you still in the line of revolving lines of credit these three are going to be different department stores like online department stores that will give you a revolving line of credit the number one store that's probably most popular is i would say my jewelers club for about 200 they'll give you a five thousand dollar credit line just pay 99 for the setup fee and then just find something you like that has to be at least a minimum of 99 once you make that 99 purchase they will then you know give you a line of credit that is worth five thousand dollars and this really works out uh because in the long run when you do apply for that amex card or whatever the goal end goal is for you they'll see that you have five thousand dollars which isn't as low as 200 and uh they'll be more likely to extend a line of credit to you another one is going to be new coast direct so new coast direct i kind of like to call it like a baby best buy you can find all different types of consumer goods on that website and also electronics and then last but not least the third option that you could do for like the department store type is hutton chase well hud and chase is another department store very similar to new coast direct only differences instead of a five thousand dollar trade line they only give you a fifteen hundred dollar trade line and then they only dispute to two of the three credit bureaus but it's still a great option if you want to add that to the credit builder card or the new coast direct it'll be another great option for you one of its best features is they do give you a zero percent apr so the interest rate is zero percent the third thing that you want to know about how to build credit is installment loans or installment accounts there's different types of installment accounts that you uh that you can have you know obviously the most popular would be a mortgage or a student loan or a auto loan that you may have for your car but if you don't have any of those then i have the perfect option for you it's called self lender self is one of these lenders that allows you to have a cd account so a cd account is called a certificate of deposit and essentially it just means that they're gonna draft for example 25 out of your account every month on a specific day and they're going to report to all three of the credit bureaus as if you made a loan payment so this is a great way to build exceptional payment history because they're automatically drafting it out of your account you know you can do 25 or more you can do a two-year plan or one-year plan and at the end of that one or two years all the money that you saved up you get access to and you can withdraw it and take it home they just charge you a small fee so for example if you do 25 a month for 24 months that would be 600 so at the end you'll probably only get 550 but you know the whole time you were saving money while building credit which is you know exceptional and another reason why stuff excuse me another reason another reason why lender is highly recommended by myself is because they have a self visa card option after you make your fourth payment and you have at least 100 in your self lender account you have access to a self visa card this is another secure credit card where they're going to basically use the money that you have in your account with them as your line of credit they're going to send you this beautiful blue credit card and then you can use it just like i mentioned the other ones you know make a very small purchase each month to help build your credit and now you have both a revolving line of credit and an installment account with self lender and it shows up as two separate accounts so now you're doing you know you're knocking out two birds with one stone and another option that you can use for installment loans or installment accounts is paying rent if you pay rent there's a website called rent accelerator you know why not get credit for paying your rent you know as hard enough as it is why not get credit for it you know i think we all should get credit for paying rent right i'm going to say it's 9.99 and you paid just that 9.99 per month and then they will report to all three of the credit bureaus each month that you pay your rent now i know before i use when i used to pay rent uh there was a website that we use called paylease.org or whichever one it was but it actually had a built-in option it was like a little check mark box that says opt-in and if you were to opt in then it shows up on i want to say transunion and they dispute it for free every month so you know if you do pay rent online you should look into it you know go to your clubhouse or you know whatever the case may be and ask them if they have you know that option for you and you should use it to your advantage and so the fourth thing you want to know about building credit is piggybacking and or trade lines well piggybacking is very popular so essentially all you do is you find someone in your family whether it be your parents your spouse or someone who's close to you that has good credit you convince them or ask them to add you as an authorized user to their credit card and i know some people may not want to tell you exactly you know what their balance is but if you can find someone who has exceptional credit and they add you to a credit line you now will get the benefit of sharing their payment history and their credit card utilization so if you currently have credit cards with the balance uh adding this line of credit to your credit report as an authorized user will knock out two versus one stone because it's going to take care of 65 of your credit score remember 35 is payment history that another 30 is your credit card utilization by piggybacking you would then have the ability to you know have 65 of your credit score um boosted essentially if you don't know anyone or if you just want more information on trade lines you know just look down in the description below and i got you then last but not certainly not not least credit monitoring you got to absolutely have to monitor your credit because if you don't know when something changes whether you have a new credit card inquiry or new late payment or just having transparency and being able to be alerted as soon as something happens um how are you going to really build credit effectively you're going to want to make sure that you pay for a three bureau monitoring service i cannot stress this enough credit karma is cool but it can be very inaccurate i'ma tell you right now if you're using credit karma do not take it serious you know it's something that you can use just for um you know casual monitoring but if you go into a car dealership or if you go into a mortgage office and have them run your credit i can almost guarantee you that what they see in their computer system is not going to match what's showing up on your phone on credit karma i have some links in the description below for ones that i recommend for example privacy guard identity iq smart credit those are uh three that i really recommend those are trilateral credit reports there's a monthly fee that you pay but again no credit scores are free apps like credit sesame and credit karma they they use their own um you know credit scoring system and even though they may use vantage 3 they're basically going off of old age credit report data do not rely on them but yeah definitely check out the links that i have in the description and so that's it guys i mean there's not really much to it you just got to make sure that you keep those five uh you know keys to success uh if you will in mind um you know making sure that you understand that no credit is just as bad as bad credit but you know if you do have bad credit it's temporary it's temporary just start working on it all right that's it i hope you found this video helpful if you did please drop a like and comment or subscribe let me know if you have any experience with building credit and uh tell me what works for you i hope you guys have a great rest of your night evening morning whatever time of the day it is and thanks for watching oh

Channel: Kelvin McNeil

Views: 8,733

Rating: 4.9669423 out of 5

Keywords: credit score increase, credit score explained, credit cards for beginners, build credit with credit card, build credit score, how to build credit for beginners, best way to build credit for beginners, how to build personal credit fast, credit score basics, credit scores fully explained, credit cards, how to get credit when you have no credit, revolving credit, secured credit cards, self lender review, Bad credit credit cards, Installment loans, How to fix bad credit, Tradelines

Id: GhPrrp3CwH4

Length: 18min 29sec (1109 seconds)

Published: Wed Nov 18 2020