HOW TO GET AN 800+ CREDIT SCORE | BEGINNERS GUIDE TO A PERFECT CREDIT SCORE| MONEY MONDAYS

open I can have it on nope I don't know we did you hey guys and welcome to another episode of money Mondays on this series you guys are basically going to see all things wealth and financial education so I talked about all things how to make money how to save money how to invest different side hustles that you can create for yourself different size different types of passive income deal in particular as once we how I was able to get my credit score up to 790 I think it's 794 right now but basically how to get a perfect credit score so I want to talk to you guys about what I did in particular and what you guys can do starting now this is basically a beginner video for all things credit score related so before we begin to this video get out of paper and pen a phone something you're going to write your notes in give this video a thumbs up subscribe if you haven't already then and also comment down below what steps you guys are planning on taking to build your credit score this year new to this whole credit score game your credit score basically shows lenders on banks financial institutions how well you handle your money so that the higher the credit score that you have the easier things are going to be for you down the road and it's going to save you a lot of money on for instance if you're going to get a car loan or if you're going to get an apartment or any type of loan in general typically they look at your credit score to see how high it is and the higher the credit score you have the lower interest rate you're going to use or you're going to be issued when you're getting a loan so this can essentially save you a ton of money yeah I'm saying like thousands of dollars what a lot of times when people go and finance a car you know your credit score is checked up your credit score is low you can get up to like 12% APY where you have a higher credit score your interest rate can be significantly lower and I'm talking like 3 to 4 percent I'm rather than the 12% that you would have gotten if you had a lower credit score and that's just one instance there's so many so many different things that require you to you know give your credit score so having a high credit score in this country is very very very important I want to talk to you guys about the different steps that you can take to ensure that you have a high credit score you can work towards that high so first things first what you need to do is get a secured credit card so if you don't have a credit card yet definitely get a secured credit card with a secured credit card you require to give it a security deposit so basically you're going to start off by giving them a specific amount of money and what they're going to do is give you that money back and a form of credit like a credit line for the couple one card it's only $49 to start off so you need as low as $49 to set up your credit card and they'll give you forty nine dollars in return as we're developing credit personally I did not do the minimum I put in $1,000 inside off top but it's honestly up to you you can still start with as low as $49 with the discover eight credit card the minimum is $200 but what's great about the discover at credit card and why I recommend that as well I actually do have I did use these two to kind of start off my credit journey but discover it is great because it actually offers cashback so on if you guys go on the website you'll be able to see that it actually offers rewards so it gives you 2 percent cashback at gas stations and restaurants up to $1,000 in purchases each quarter besides that you get a one percent unlimited cash back on all other things that are not breastaurant groceries for relief related so that's a great alternative you guys so I personally recommend the discovery at credit card first because of the cashback offers the capital one card is also great if you don't have that suing $1.00 to set off I'll talk more about the importance of having multiple credit cards later on in this video so first things first you want to get a secured credit card what's great about offering another great thing about discover it is that currently right now they're doing they're matching your cash back so instead of 2% cash back on the restaurants and grocery stores and 1% for everything else now they're doing 4% for the restaurants and grocery stores and 2% for everything else for your first year so that's a great guys that's a great thing to take advantage of you're basically getting money back from things that you're paying for it so you might as well you know it's basically free money at this point what's great about these two is that because you're using your own money to start off literally anybody can get approved for these credit cards it's not as hard as the other credit cards that I'll probably mention and it's a different video so you literally can apply for it online and they'll send you the card in the mail so I'll put the links to both discover it as well as the capital one card down below I recommend you guys to get both actually so get those two links in the description bar down there's actually want me to do a video on all the specific credit cards that I use definitely let me know down below that's not gonna be what I want to be talking about today but there are so many perks of different credit cards a lot of people don't know and don't take advantage of just give you guys a few before we begin but you know you get cash back so you get money back from specific purchases up to 5% so some some credit cards give you 5% cash back on things that you would normally pay for it so paying with a debit card will give you zero percent cash back however paying with a credit card will give you 5% and so you're baking money often just paying for things that you would normally pay for so if your credit cards like the AMX are American Express credit card they will give you travel miles and set of cash back and that basically allows you to fly wherever you want for free just because of how much you're spending on that specific card so credit cards offer roadside assistance so a lot of people pay for this in their insurance however you can you know opt out of that and use your specific credit card for Road roadside assistance and you can just call the number on the back of your credit card and they will do what and that will help you out with different things like getting gas for your car what's a call you if your battery runs out if you need a tow truck like those are things that you literally get for free just because you have a specific credit card but another perk that credit cards also offer is travel and auto insurance so that means that if you use a specific credit card on life or for example if you rent a car they will automatically give you free insurance up to I forget how much it is it honestly depends on the specific credit card but that is another perk that a lot of people don't like really read in check and another thing is signup bonuses some credit cards literally give you two hundred to five hundred dollars just for signing up what specific credit card obviously you have to do research on all the different ones that you know of course you would be interested in which ones will have the best perks and benefits for you some credit cards have higher cashback for certain things like I have a credit card that I use only for groceries I have a credit card that I use only for shopping I have a credit card that I use only for restaurants and I do this because I know that I will get a cash back I will get cash back on those specific purchases rather than with my debit card which I'm not going to get any cash back on so it is a lot of things to kind of like take into account for like I said if you guys want a video on my favorite credit cards and the credit cards that I use on a day-to-day basis definitely let me know there's going to bar down below and I will definitely talk about that and you guys will also find out in this video that having multiple credit cards will increase your credit score based off of my six or seven credit cards I have I have about forty thousand dollars of credit available for me to use I only use about 10% of that because credit utilization is also a key component of how high of a credit score you're going to have so that is what I want to give you guys a heads up on before going into the video because a lot of people have like bad stigmas and negative stigmas towards credit cards but if you are using it the right way and you're paying off your credit card every single month it can be very very very beneficial to you so I want to talk to you guys about the different things in today's video though and now we can actually start talking about how to get a high credit score so now that you have your credit card now it's what to do to increase your credit score as fast as possible and as easy as possible so I'm going to talk to you guys about the different things that impact your credit score and when I try and think of when I think of this I kind of think of it as like a grade in college so you know a lot of times when you go into a new class at a new semester you kind of get a great breakdown and if you don't really understand the great breakdown it's gonna be hard for you to get an A in that class because you don't know how much the exams are waiting how the tests are weighted and you kind of want to have a good understanding of that before going into the class to go over the different things that go into your credit score and how you can fully take advantage of each part to get the highest score possible first thing that is on this list is on-time payments so the on-time payments accounts for about 35% your credit score and this basically means that you want to make sure that you are paying your credit card off every single month on time you do not want to miss a payment at all during this entire process because this can definitely affect your score I recommend all of you guys to do is to set up your credit card to have an auto bill pay so what it's going to do is automatically pay your bill every single month so you don't have to worry about it and this is honestly the easiest way for me when paying for things on your credit card just know in the back of your head that I'm going to have to pay this at the end the month so you do not want to spend too much on your credit card I'm actually going to tell you guys about how much percentage-wise you guys should be using on your credit card in the next step so first you're going to set up auto bill pay on your credit card there should be somewhere on your website to do it or you can call either Capital One or discover it to do it over the phone but you want to make sure that you're paying your bill every single month on so like I mentioned before 35 percent of your credit score is based on your on-time payments because I have a hundred percent of my payments made on time I had that full 35 percent so basically the way that this is calculated is your amount of on-time payments divided by your total pay under ninety percent is below average between ninety and seven between ninety and ninety seven percent is average 98 to 99 percent is good and 100 percent is excellent so I'm actually excellent on this because I have made all of my payments on time making a couple of payments late will affect your credit score drastically so below average is under ninety person had my for example if I had one credit card for the past two years which is twenty four months I would have had to make twenty four payments if for any reason I missed out on or I was late to about three so twenty four minus three is twenty-one and that means now twenty-one on-time payments out of twenty four altogether that's already eighty seven point five percent and that's below average so that just goes to show how drastically your credit score can be you know dropped just by a couple of just by a couple of late payments counts this does not mean that you have to make the full payment for its account as it time-payment all you need to do is make the minimum and a lot of times the minimum is only like twenty-five to fifty dollars so one thing I recommend is to make your payments on time or at least to make the minimum if you can pay off your credit card every single month and that's something that I definitely do recommend all of you guys to do and that goes on to the next step so next um the next part of this little breakdown is your credit utilization so that accounts for 30% of your credit score utilization this is basically saying that you don't want to use all of the credit that is available to you so out of my on between my seven credit cards I have about forty thousand dollars of credit that I can use if you only put two hundred dollars into your Discover at credit card you only have two hundred dollars available of credit you only want to use ten percent of what your credit offers so your your being opera 200 you only want to use 10% you only want to be using about 20 dollars off of that because you're only going to be using 10% of what your credit card offers this is because you don't want the banks to feel as though you are relying too much on credit so um obviously you have it there but you want the banks to know that yeah I'm good without it type of thing so it's kind of weird and that's why I say that there's a lot of strategy that goes into it but credit utilization is thirty percent of your score so you want your credit utilization to be as low as possible so mine in particular right now is at 0% because I don't keep a balance on my credit card every single month I pay off my credit cards in full if you have a three hundred dollar limit and you're using three hundred dollars and you still have a thirty dollar balance you are using a hundred percent of your credit utilization what you can do to kind of leverage this and this is one thing that I do recommend is to get multiple credit cards so for example you have one credit line for example Capital One you only have 300 dollars of you only have a three dollar limit on there you're only using 10% so that means you're only using very dogs on that specific card what you can do is you can open up another credit card like discover it and put another $300 limit on there and use only 10% of that and that's now sixty percent so so basically to maximize this is to get multiple lines of credit and don't keep a balance on your credit card only use what you can afford on these credit cards so that you don't have a balance on there and you can keep your credit utilization as high as possible so now for number one and number two I am at 65% cuz I have a hundred percent of on-time payments and a hundred percent of credit utilization so the next thing here is your length of credit history and this is something that definitely did affect me so one thing you want to do is start building your credit as early as possible a lot of people don't realize that the length of time of your credit history definitely does play into effect so this part is 50% of your score and this is kind of the part that definitely did affect me a little bit because I did not start as early as I could have I only have my oldest line of credit is only at 2e obviously I'm not gonna have a hundred percent of this category because I only started two years ago I believe the in order to get a hundred percent in this specific area you have to have a line of credit that's over like seven years so that's just one thing for you guys to keep it bandaged but you have to take into account is that your length of credit history is not how long you've had credit for it's your average time for credit so for example if you had your first credit card four years ago and then you just got a recent one one year ago four plus one is five divided by two is two point five so now your average length of credit history is two point five years and as many credit cards as you can earlier on so that you're not getting multiple down the road because the ones that you get down the road is going to kind of make your credit your length of credit history shorter because they're gonna take the average of the ones from before like five six years ago as well as the most recent ones that would be like a year ago start another example to kind of make things easier in your head is that if you got a credit line six years ago and then you got another credit line you know two years ago six plus two now is eight so now your average length of credit history is now four years instead of six years because you just added in another one in so it's kind of hard to you know go about it but you kind of want to like balance it out because you also do not want to get too many credit requests so before that accounts for a 50 15 percent of your credit score the next thing here is on the amount of credit lines that you have opened in the past two years so tip so this is important because if you open up too many accounts blenders and stuff like that will wonder why you are at an urge to open up credit like why do you need so much money why do you need someone to credit right now even though they obviously don't know that you're only opening up these credit lines to build your credit they're just confused as to why you know why this person needs so much credit right and they might they might they might even think you're overextended financially but you're like in a rut and you need money like now now now so obviously that's not good in the lenders eyes so you want to try and keep the amount of credit lines that you open to a minimum so in order to be an excellent in this category you should only be opening up to two credit lines every two years so me in particular I wanted to open up a lot in the beginning when I'm just going off my credit because of the length of credit history which is 15% but after that I know that I have as much credit as I need I'm not gonna be opening up any more credit down the line because I have everything I need right now so after that two years my my either those these two years now my credit score is gonna jump up again goes to show like the things that you're doing now is definitely going to affect what's gonna happen in the future as long as you're creating doing the right steps I am at average however in the next two years I will definitely be an excellent because I'm not going to be opening up any more or I'm not hoping to open up any more than two credit lines in the next two years so tip you guys opening up multiple credit lines you still have to make sure that you're paying it off make sure that you are making your payments on time so that you're not you're not messing up your highest percentile which is their on-time payments of 35% so I have a hundred percent of on-time payments and I have a hundred percent of credit utilization so that means that even though I'm still only at average for this specific category of opening up credit lines and it's only going to affect me for the next two years so it kind of balances it it kind of bounces out because I'm kind of preparing for this last but not least is your credit inquiries and this is count and this accounts for 10% so every single time that you create an inquiry for example if you're trying to get a car you're going to different you know car dealerships in your constantly letting people run your credit that affects your credit score and that's 10% so recent inquiries I only have one recent inquiry so I'm at the good I'm not an excellent because excellent is that zero so this kind of ranges from 6 6 plus to zero so 6 plus if you have more than 6 in the past two years and highly impacts your credit score because you're going to be below average average is around three to five to being good standing you're at one to two which is where I am at right now and some excellent is to have zero credit inquiries in the past two years which is gonna be very hard especially if you're going to be applying for loans if you're quite trying to buy a house if you're trying to buy a car but you don't want to try and get that as low as possible the only thing is like I said before it only accounts for 10% of your entire credit score so it's not really going to affect too much if you're doing everything else correctly but it is kind of like the whole purpose of you building your credit score so that you can use your credit so don't take don't think too much into that if you're trying to actually use your credit score for something you know it's hoping so those are the five different things that are and your break down for your credit score if you were doing all those different things correctly and you follow the steps that are in this video as well as then in the description bar down below you should have a very high credit score by the end of the year or obviously a higher credit score and the time to come and so that basically it for this episode of moneymondays definitely come down below which steps you are planning on starting to help bring up your credit score you guys can also let me know what your credit score goals are if you're interested in doing that but honestly if you're taking into account all these different steps there is no reason for you to have a very high credits so that's basically it don't forget to Like comment and subscribe and I'll see you guys in my next video bye guys you

Channel: LavishRuby

Views: 40,290

Rating: 4.9720812 out of 5

Keywords: lavishrubytv, side hustles, streams of income, multiple sources of income, graham stephan, nate obrien, make more money, money making apps, make . money fast, make money 2020, money mondays, lavishruby

Id: 0oP4Bkqr6Tw

Length: 19min 32sec (1172 seconds)

Published: Tue Feb 11 2020