How To Build Credit

Researching how to build credit? Duane here is How To Build Credit TV and in this video I’m going to be talking about 4 things to consider when learning how to build credit As a matter of fact these are the exact same steps that I used to get my credit score from 518 to what it is currently

Be sure to watch the entire video because I’ll log into my account and actual show you part of my credit history as well as what my current credit score is But before we get started I have a quick message Once again my name is Duane with How To Build Credit TV and this channel offers 100% free information about how to build credit, how to get cash back actual cash money from using credit cards as well as credit card reviews So this is your first time watching our videos be sure to subscribe and click the notification bell Alright so let's get started so you're interested in how to build credit

Whether you're just starting out or rebuilding your credit, A healthy credit score is something we all need in order to get a loan, a car, be able to buy a house, and even start a business Unfortunately I've ruined my credit a couple times but I'm smarter this time and as a matter fact I’m gonna take you guys along with me for the rest of my journey on how to build credit So if your credit is messed up right now that’s ok there’s hope because along with this information and some patience you’ll be able to build or rebuild your credit So here are four things you should consider when learning how to credit Number one why do we need credit? Well we need credit to have access to things we can't pay for right off the bat or that we may not have money laying around in the bank to pay for such as a car, such as a home, such as financing whatever you need to finance

You see more of us in our lives will need access to at least one or if not all of these items A cell phone, cable, internet, a car, a home loan, or even start a business, a credit card, So there are alot of reasons why we actually need credit In addition to needing credit to attain some of those things, having a good credit score to make your life easier or at least save you some money in the long run You see the higher your score the lower the risk or at least that’s the way the banks see it So the higher your credit score the lower the risk as far as there concerned when its comes to actually lending you money

The same is true for credit cards the higher your score of the more likely that they believe that you are to pay your bills on time and to manage your accounts That brings us to the second thing that you need to consider when learning how to build credit 2 Credit score, what is your credit score? More importantly how is it comprised? You don’t have a credit score I’ll talk more about that later We live in a time where more information is right at your fingertips so it is imperative that you get your hands on your credit score as well as your credit report

You can actually find a bunch of different places online to get access to these things for free One of the websites I like to use is annualcreditreportcom Be sure not to pay for these services You should be able to access these things for absolutely free And if you have a credit card at the moment you can also get your credit score from just about all the major credit card like Chase, Citibank, Discover, Capital One

A couple more places that I like to go to attain my credit score is Credit Karma and Nerd Wallet You can find that online and once again the service is free Now of course when you sign up they’re gonna try and upsell you on getting credit cards and tell you different things that you “qualify” for, just be focus you went on the site for a specific reason And that’s not to apply for more credit cards because in the end applying for too much credit cards could hurt your credit score having too many inquires could hurt your credit score So just be mindful of that and not fall for that trap

Stay focus you went to the site to get your free credit score I’m sure you’ve heard the old adage that knowledge is power and in this situation there’s no difference Get your hands on your credit score get your hands on your credit report and look for any inaccurate information that may be on there because if you dispute that and its taken off your credit report your credit score may actually go up So be sure to look at information and make sure that everything is accurate A good website to be familiar with is consumerfinance

gov As a matter of fact I'm going to jump over my computer and show you how to navigate so you can access areas and information about credit report So this is the website consumerfinancegov On the left word says consumer tools you just go over there and you’ll see here on the left where the mouse is it says credit reports and scores You click on that and that'll pull that up for you Wow my computer is slowly

Wondeful! Man this Mac I’ve had since 2009 it’s a MacBook Pro It’s very ah pro at the moment But anyway it pulls it up here But there is a lot of information here guys be sure to take your time and go through and just do all your research I mean knowledge is absolutely power so definitely do your research okay I'll see you guys in a bit

Alright welcome back I'm going to talk about this briefly here but I make videos that are more detailed So there are five categories that make up our credit score and this is going to be in the order of the most weight to the least weight Number 1 Which holds the most weight is payment history Payment history is 35% of our credit score it is imperative to make on-time payments missing one payment could hurt your credit score, in most cases it will lower your score for a while Number 2

Credit you utilization also known on other scoring models as amount owed This category makes up 30% of your score If you want to maximize this category use between 0% and 10% of your credit card limits If your credit limit is $1,000 make sure that your balance is $100 or less when your credit card statement closes What I do personally is I use my credit card for all my transactions because I'm earning cash back or points that I can redeem however I'd like

I'll talk more about credit card rewards in another video I also make payments to my credit card once a week sometimes twice a week I never carry a balance on my credit cards because I don't want to pay any interest Number 3 The third category is credit history or length of credit history

Credit history makes up 15% of our credit score and easy example of credit history is how long have you had a credit card It's super important to keep your credit cards open and never close them that's why you should choose credit cards wisely certainly try not to get credit cards that have annual fees unless the perks outweigh the annual fee The fourth category that makes up your credit is new credit This category is 10% of your credit score new credit refers to how many new accounts or hard pulls have taken place within the past two years An example of a hard pool is when your credit is checked to get a car, a new credit card, a new loan and sometimes a credit limit increase on your current credit card

The fifth and last category that makes up our credit score is types of credit For example a major credit card, a department store card, a car loan, a house loan and even a business loan This last category is also 10% of your credit score Alright so now before we jump into the third thing that you should consider when learning how to build credit, don’t forget to stick around because I’m going to login to my account and show you guys a part of my credit history as well as my current credit score So the third thing that you need to consider when learning how to build credit is what do I do if I have no credit if you have no credit

If you have no credit you have a couple of options Depending on how fast you would like to have credit you could get a secure card (more on that in a bit) or you could try starting a relationship with a bank If you have big banks that are close to you are banks like Chase maybe open an account with them and you know keep the account in good standing for a couple of months probably between 6 to 8 months and then at that time you could applying for a credit card If you apply for a credit card and you rejected this is where the secure cards come into play and these secure cards a lot of people may not know about this but having a secure card is very powerful In a way it's like you can't be rejected for the credit card

The only way you're not going to be approved for the credit card is if you had some kind of bankruptcy but if you did not have or don't have bankruptcy more than likely you'll be able to get a secured credit card What is a secured credit card? A secured credit card is when you apply for a credit card with a bank but you have to actually put collateral up front In most cases the minimum deposit is $200 and it goes all the way up to $10,000 in some cases but the common ones would be between $200 and $2,500 So let's say I wanted to get a credit card but I wasn't able to get an unsecured credit card I apply for a card and I was rejected or deny, whatever my credit wasn't good enough so I apply with bank X and this bank allows me to have a secured card with them but I have to put a deposit upfront

So I would give them $1,000 and my credit limit would be $1,000 There’s a bunch of secured cards out there online that you can apply for and I’ll make a video talking about the ones that I like and even the ones I've actually incorporated in my own history or my own journey to rebuild my credit So be sure to stick around for that and ah watch those videos as well Before I get to the 4th and last thing you should consider when learning how to build credit I want to go ahead and log into my Capital One account and show you part of my credit history as well as my current credit score

Now this is something I've been working on for quite a while, in regards to credit and credit score some things just take time I'm going to go to log into my account here I'm going to pull up a recording on my screen here so you guys can see Okay here we go so this is my screen here I'm going to go ahead and touch my finance tab or folder and I’m gonna click on Capital One and you guys be able to see this I’ll actually put this on the screen so you can see I'm going to log into my account I’m gonna touch it there and get my fingerprint So we’re logging into my account and I'm going to click on credit-wise because that's what Capital One and ah it’s a free,’ free service so I’ll click on it and will show you what the current credit score is as of last Thursday I think it is

It updates every 7 days so there you go ah the next update is in a couple of days, today’s Tuesday so anyway I'll click on my credit history Ah actually one thing right there the first thing that you see it says “what impacts your credit” and says on time payments, on time payments This is payment history this is 35% of your score so if you want a good credit score you have to maximize every single category You have to try to get as much as as close to a hundred percent that you can out of that 35% that make up your credit score I'll talk more about that in other videos I’ll go ahead and show you my credit history here

Okay here we go Alright so as you can see I'm going to go back I'm going to touch the bottom where these three dots are I'm going to go back to 2017 I'll start in July so I just touched July there you can see my credit score was below average it was 619 I was still kind of trying to figure this out which is interesting because I just kind of learned some of the stuff by watching YouTube videos ironically and here I am making YouTube videos So if you got to stick around and watch these videos all the things that I talk about are from my personal experience and they’ve worked for me and it really should work for you in most cases they do and I'll even go so far to say that it will work for you So be patient make sure you check out our videos alright

Subscribe by the way! Alright as you can see in July  I'm sorry that was June, June was 619, July was 630, August 649 so you see it's going up or at least for a little bit and then in September was 673 and October 673 November 673 December 675 and that brings to 2018 January 662 I'm not sure I don't remember the details as to why it went down but I will tell you this Credit utilization is huge is a lot of wrong information out there about your credit utilization A lot of people say as long as you're around 30% you know 30% good NO you need to be between 0 and 10% that is how you maximize that category of your credit score the credit utilization is worth 30 points, 30% sorry 30 points too much cashback 30% of your credit score so it's imperative that you're aware of how much credit you're using if I have a $10,000 credit limit I should not have a balance higher than $1,000 on that card because I'm trying to keep my credit utilization under 10% And when I do that I'm going to max out that category I'm going to get 30% of my credit score because that's what credit utilization makes up 30% of your credit score

Sorry about that, so as you can see here on the phone February my credit score is 678 and then in March it jumped up a lot of points to 703 which brought me in the good category anyway so that's enough I’ll log out here What it comes to how to build credit there really is not a quick fix if somebody's telling you hey we can fix your credit real quickly so on and so forth I mean there's only a couple of things that they could possibly do if there's discrepancies on your credit report clearly challenging that and disputing that and getting that removed will help your credit score There are a couple other  things that you could do to improve your credit score pretty drastically but for the most parts of your credit score is just going to take time Thanks for watching this video be sure to like comment and subscribe

As a matter of fact let me know what your lowest credit score has been well if you feel like sharing And remember knowledge is power, so do your research until next time take care and be blessed PEACE