How to Fix Your Credit Score Fast!

in today's video I will teach you how to fix your credit score fast I had a very bad credit score but now I've boosted it up to 846 so first I'm going to show you my credit score and then I'll teach you how to fix your credit score fast so let me show you this I'll open up my app I'm sure you have something similar my credit score is 846 out of 850 and this is coming from Experian you can look at my one-year history it's been good for the past year so here's how I have an 846 this is not to flex who brags about their credit score this is for educational purposes you have to pay your bills on time this makes up 35% of your credit score I have zero late payments this wasn't always the case but I learned my lesson now moving on to my debts so I am using 1% of my available credits my total revolving debt is a whopping $900 now moving on to credit history the average age of my accounts is 7 years my oldest account that's my credit card is 19 years old so that's why it's important to get a credit card when you're young and keep it active so next is what's preventing me from having a perfect credit score it's the hard inquiries so I really wanted these two new credit cards because of the rewards one was mileage another was 5% cash back at a store I couldn't resist but now I have too hard inquiries now moving on to types of credits I have eight revolving accounts which I barely use $900 in debt I have seven installment loans on some of my rental and Commercial properties and no car payments fortunately living the dream living the good life right so my credit score is 846 now let me tell you how I did it how I fixed my credit score you need to check your credit report regularly when my credit score was bad it shot up by more than 100 points overnight so I'll tell you what happened so there was a fraudulent charge and that balance got sent to collections and it was on my credit report and that destroyed my credit score if you identify an error on your credit report you can dispute it and get it fixed so the credit bureaus are legally obligated to attempt to fix the mistake so I did this and it boosted my credit score contact the credit reporting agency you can do it online you don't even have to speak to a human explain the discrepancy in writing they will ask for some documentation give them what they need and if it is an error they will remove it it's going to be an instant boost to your credit score and it can be significant it was for me so I did not check my credit report regularly and that was a big mistake so I should have known better but nobody told me these things so now I'm telling you so this leads to very interesting question do you need a credit monitoring service to alert you of suspicious activity so personally this is just my opinion I don't think so I do not subscribe to those services and I'm just you I'm doing fine without it a lot of the banks a lot of the credit card companies will give you automatic alerts for free so just make sure that they don't end up in your junk mail and just so you know there's so many of those businesses you've probably Seen Those ads that claim to fix your credit for a lot of money and it's usually a ripoff they mostly look for errors on your credit reports but you can do that by yourself for free and it's very easy it's so easy so the reason why those companies are in business is because so many people have errors on their credit reports the Federal Trade Commission says that 25% of Americans have errors on their credit reports so you can get a free copy of your credit report through experion Equifax and Transunion again I fixed an error my credit score shot up significantly overnight another way to boost your credit score is by requesting a higher credit limit so I do this all the time I get bored of my credit card app and I request more credit that's just what I do and then the auto message pops up saying that you can only request an increase every 12 months please stop asking but I just you know I can't remember when I last requested it so I just keep on requesting it and it's bound to work one of these days anyway the reason why I request a higher credit limit is because it helps my credit score here's why so for example if you owe $900 and your credit limit is $1,000 then you are utilizing 90% of your available credits and that's a very bad look on your credit reports 90% utilization but if you request a higher credit limits and it goes up from let's just say $1,000 to 10,000 then your credit utilization would fall from 90% to 9% and then you would look much better but listen I want to tell you this if you have an uncontrollable spending problem then do not request a higher credit line please number three is that you have to pay your bills on time so I'm going to tell you the truth when I was young I don't know what I was thinking so sometimes I would owe money and I just I just wouldn't pay it for whatever reason and I always thought you know what are they going to do to me and you you know what they did they sent me to collections and it showed up on my credit reports and then I got labeled as a delinquent and then it destroyed my credit score so don't be like the younger version of me just playing irresponsible so please pay your bills on time sometimes I don't know if you do this but this was just me when I owed money for a service or a product that I was unhappy with you know I was a dissatisfied customer I would just not pay the bill to prove a point and that did not have a happy ending so don't try to be a hero I know that you may be a person or principal just like me but sometimes it's just not worth it it's not worth your credit score suffering if you have a late payment it's going to remain on your record for seven years s years is a long time you know what happened to forgive and forget right well you know they'll do that after seven years but here's how it works you're laate on a bill it gets reported on your credit reports and your credit score Falls significantly it falls immediately if you're late 60 days or longer that's going to hurt your credit score more than being late 30 to 59 days so please watch out for that but you need to know this even though the late payment stays on your credit report for seven years right it doesn't mean that your credit score will be low for seven years your credit score will quickly begin to recover little by little if you make your payments on time so I I have witnessed this with my own eyes so even with late payments on your record you can begin the repair process here's another quick fix for you the credit reporting agencies make a big deal about credit card balances so it's important that you bring these balances down and if you want to know how to reduce your credit card balances I have dedicated a video to this they are legit methods there's no sales pitch I'm just trying to help people out so please check out that video I will leave a link down below number five is do not close down your old credit cards you may think that it's a good idea to close a credit card that you're not using but no that is a bad idea that hurts your credit score even if you're not using a credit card please keep it open so here's why so I showed you how they judge you they look at the age of your accounts they look at your credit utilization if you close a credit card then you are hurting both of those factors so I understand your two concerns so number one you want to close down a credit card because you have a different credit card that gives you better rewards right you've upgraded and you went to greener pastures I get it but please just keep your old credit card open and number two is that you want to close down your credit card because you're afraid of identity theft or fraud but just do what I do just don't carry that old credit card around put it away in your secret stash and just forget about it so I'm telling you to keep your old credit cards open but there are exceptions if you have a credit card that you don't use but they charge you an annual fee then yes you should consider closing that credit card because that sounds like a big waste of money also some credit card companies will terminate your card due to inactivity so if you want to avoid that situation put a monthly subscription charge on that credit card or just use that card every once in a while another idea is becoming an authorized user so I'm going to be honest with you I'm hesitant to bring this one up but people always bring this one up as a way to boost your credit score personally I never did this and I'm just really going to fly past this one because who's really going to vouch for you like that because you're asking a friend or you're asking a family member for access to their line of credits so that is a big ask it's like hey buddy I have bad credits but can you give me access to your credit card so it's A Hard Sell I find it unrealistic but if you can persuade someone into doing this then that is awesome number seven you must stop hurting yourself with hard inquiries so sometimes there's no way around this like when you need a mortgage but if you're trying to fix your credit score don't unnecessarily seek out hard inquiries so hard inquiries damage your credit score and they stay on your credit report for up to 2 years now if you're serious about improving your credit score and you want a better understanding of how they judge you and come up with your credit score then this will be very helpful to you now let me tell you what you need to do to improve and maintain your credit score so I want you to understand the fundamentals I want you to understand how this works so your credit score tells third parties How likely you are to pay what you owe so your credit score is based on your credit reports your credit report includes your activity and history based on information from financial institutions credit card companies and lenders so your financial activity is compiled into a report and a formula is used to create your credit score and this formula is based on five factors your payment history makes up 35% of your credit score amounts of debts or utilization 30% length of credit history 15% credit mix 10% and new credit 10% now let me give you tips on how to boost your score on each one of these categories your payment history makes up 35% of your credit score so this is the most influential factor to become and maintain super Prime status you need to build a history of ontime payments just think about it from the perspective of the lender if you are asking to borrow money to buy a vehicle or to buy a home then the lender wants to see that you have a strong track record of making timely payments your payment history includes activity from your credit cards Auto Loans mortgage loans and delinquent accounts your payment history is also going to be affected by activities in collections and bankruptcies so listen if you're late on a bill that's going to stay on your credit report for 7 years and that's going to significantly lower your credit score but if you make your payments on time then your credit score will begin to recover gradually after 7 years a late payment will completely fall off your reports here's a general guideline about your payment history you are considered Excellence if you make 100% of your payments on time 98% to 99% on time is good 90% to 97% is considered as average less than 90% on time is below average now I'm going to give you advice in each one of these sections but here it's very straightforward you need to pay your bills on time if you have a late payment then yes it's going to hurt your credit score it's definitely not good but it's not going to be the end of the world so personally I've made late payments in my life it it happens for whatever reason but just don't make it a habit and you'll recover so it's happened to me but now my credit CR score is super Prime so please make it a priority to pay your bills on time so I want to tell you this I showed you my credit info and you saw that I've been very good about making my payments on time this is definitely the most important factor so please be diligent about this one the amount of debt that you owe is the second most influential Factor this makes up 30% of your credit score this is also known as your credit utilization credit utilization is how much of your available credits that you are using the lower your utilization the better if you are using a high percentage of your available credits then this may indicate that you are overextended and lenders will perceive you as a person that is at a higher risk of defaulting so a higher utilization will hurt your credit score so that's how the lenders see it a higher credit utilization lowers your credit score a lower credit utilization increases your credit score so here's a general guideline of credit utilization you are considered excellent if you're using 0% to 10% of your total available credits good is 11% to 30% utilization average is 31% to 60% below average 61% to 100% so if you remember this is why I said that I constantly request a higher credit limit on my credit cards because I want to boost my total available credit so that my utilization goes down which is good for my credit score moving on to the third most influential factor in your credit score is your length of credit history which makes up 15% of your credit score this refers to how long you've had credits and the average age of your accounts a longer credit history is good for your credit score because this shows that you have more experience using using credit here are the primary factors for determining the length of your credit history age of your oldest account age of your newest account average age of all of your accounts and here's a general guideline of the length of your credit history your history is considered excellent if you've established 25 years of history or more 8 to 24 years is considered good 3 to 7 years is average 0 to 2 years is below average so of course if you're younger you're going to be automatically dinged in this section for not having a longer history But as time goes on this section of your credit score will improve as you build your history that's why it's so important to start building your credit history as soon as possible so you saw my stats I started building my credit at an early age and as quickly as possible and I kept that credit card open this whole time which is boosting my credit score another thing that I want to point out out is that even though my oldest account is below 25 years old I still have an excellent credit score so 25 plus years that's not necessary to have a great credit score the next factor that will impact your credit score is your credit mix your credit score will take into consideration what types of credit accounts that you have which include credit cards mortgage loans auto loans installment loans retail accounts Etc having a mix boosts your credit score that's because it demonstrates your ability to successfully manage different types of credit but honestly don't worry about this in order to be super prime it is not necessary for you to have each one of these loan types therefore do not go applying for different types of credits just to boost your credit score because remember that this only makes up 10% of your credit score and the cost benefit is just not worth it okay so here for me I do not have an auto loan so I don't have all these categories but still my credit score is just fine so again you don't need to check off all the boxes in order to have an excellent credit score the last factor that impacts your credit score is new credits so this is very important for you to understand because you will run into the situation multiple times in your life when you apply for a loan they will perform a hard inquiry and this will hurt your credit score an inquiry is when your credit report or your credit score is requested and the credit bureaus keep track of these inquiries if you have a lot of inquiries then it's a bad look because it looks like you are struggling financially because you're frequently looking to borrow money from multiple sources and it's very important that you understand this especially if you're looking for a loan if you have multiple hard hard inquiries in a short period of time those multiple hard inquiries will count as a single inquiry the time frame allowance is about 2 weeks so here's my tip if you're going to shop around for the best interest rates with hard inquiries do it strategically in a short period of time that way all of those hard inquiries will count as a single inquiry if you spread out the inquiries over a longer period of time then you will have multiple hard inquiries on your credit reports and it's going to lower your credit score so here's a general guideline of hard inquiries if you have zero hard inquiries in the past two years that is considered excellent 1 to two is considered good 3 to five is average six or more is below average and I want to give you this tip when there's a moment in your life when you don't need a perfect credit score that's going to be the best time to get an additional credit card so I want to explain this so let's say that you recently bought a home or moved into a new apartment or you just got an auto loan when you do these activities you will need to show your credit score and having a high credit score that's going to be very important to you at that time but let's say that you do those things and then in the near future nobody's going to be checking your credit score for at least a year or two because you just got an auto loan you moved into your new place and that is going to be the perfect time to get an additional credit card that's because when you apply for a new credit card they're going to run a hard inquiry on you and that's going to lower your credit score right and if you get a new credit card then the age of your newest account it's going to be recent and then it's going to hurt your credit score as well but honestly in that situation who cares because nobody's going to be looking at your credit score anytime soon and then in the future those factors will swing in your favor and it's going to boost your credit score because because the hard inquiry it's going to fall off your record your newest account it's not going to be so new anymore it's just going to get older your available credits will go up your utilization will go down and those are all good for your credit score so if you're going to apply for a credit card and your credit score is going to take damage in the short term then the best time to do that is when nobody's going to be looking at your credit score so when you saw my info I showed you that I had two hard inquiries right because I told you I mean I just being honest that I really wanted those two credit cards for the rewards and right now I do not plan on applying for new credits so right now is a great time for my credit score to take a hit it it didn't seem like it took much of a hit which I'm surprised by but you know that works for me so listen you can fix your credit score fast if I can do it then you can do it too my credit score was terrible I don't know what I was thinking when I was younger but I learned and I wanted to share this with you please subscribe I thank you for the support and I wish you a very nice day take care

Channel: ClearValue Tax

Views: 79,986

Keywords: how to fix your credit score, fix your credit score, fix your credit score fast, how to fix your credit score fast, how to fix your credit score fast for free, credit score, how to boost your credit score, how to fix a bad credit score, fix a bad credit score, increase your credit score, how to raise your credit score, graham stephan, dave ramsey, personal finance, credit cards, credit card, stocks, how to increase credit score fast, how to fix credit score fast

Id: Yz63OVcIFrE

Length: 21min 5sec (1265 seconds)

Published: Mon Jan 08 2024