In today’s video, we’re going over the five things you need to know, to get a 800+ score! And if you think it’s only just paying on time, you’ve been misled.
So, I’m gonna start off with the highest all the way down to the lowest of the priority and the importance of each one of these items.
Number one is your Payment History. Your payment history is 35%, of your credit score. “Do you make your payments on time?” It’s that simple. But remember this, all the people that say, “All you have to do is just make your payments on time and don’t worry about anything else” they’re literally only 35% correct.
So number 1, 35% payment history. Making sure that you make your payments on time each and every month. No exceptions, and on the very rare case where you do have a problem where you have missed a payment, something happened to you, you couldn’t make a payment for that month, etc… there still are things you can do such as sending out goodwill letters.
Goodwill letters are important because you’re able to appeal to the creditor and say essentially, “Hey, my bad. I was going through a rough month. I was going through a rough couple of months. I’m a loyal customer. I’ve been here with you guys for years. Please go ahead and correct that for me.” Alright? That’s a goodwill letter. So you always want to make sure if you do nothing else, make sure your payments are never late.
Number two. What is the second most important item that you need to pay attention to when building a rockstar credit score? Number two is your Usage. Your usage or this could be called your utilization rate. What that means is, if you have a credit card for a thousand bucks, if you go ahead to best buy and you just swipe, swipe, swipe and you maxed out that card, you have maxed out the utilization rate for that card and that is going to plummet your credit score.
Lenders don’t want to look at your credit report and think that you need your credit…That you’re living off your credit card. These banks and these credit card companies want to give credit to people that don’t look like they need the credit. So if I’m only spending 10%, 20%, 30% of my credit cards and I’m just leaving the rest untouched, I’m looking like, “Hey, I don’t need the money. My income has taken care of everything else. I just used 15-20% every month just to maybe get some rewards out of convenience.
If I’m maxing out my card every single month, the bank is going to look at me like something is wrong with this guy. He must be broke. He’s living above his means. He’s living off our credit card. He’s a high risk. That’s going to plummet your credit score. So the second most important thing to do when getting your credit in shape, check out all of your accounts. Make sure nothing is over 30%. If you can get that under 10%, you’re doing better than most people. But if you’re under 30%, good. And there are still ways around that too, there are still ways around that but for this video, I wanna keep it very simple, alright.
What is number three? The third most important thing that impacts your credit is History. What do I mean by your history? What I mean is, do you have an account that was just opened last month? Did you just open up this account? Or did you have this account for five years? Ten years? If you only had it for a month or two, how do I know I can trust you if I’m from the bank. How do I know that you have a history? Your reputation is built on great payment history. If you don’t, I may not be able to give you that loan, I may not. Right? So you wanna make sure that any accounts that you have, you keep them open, you don’t close down accounts. Keep your accounts open. Get that good age on them. And if you can’t get age, let’s say all of your accounts are just new, there’s still something that you can do which is getting an Authorized User Account.
Authorized User.
An authorized user account is where you’re essentially taken on to somebody else’s account. Let’s say mom and dad have a chase account or a bank of America account that they had for 10 years. And you’re starting off. Maybe you are rebuilding your credit. Your parents can actually put you on as an authorized user on their old-aged account that has a good positive history, and your credit will get a boost. That’s called using an authorized user account in order to kind of bypass and trick the system so that even though you just started out rebuilding your credit, your credit report will look like you do have older age credit. That’s the trick. And if you need some tips on that, message me below and I can take care of that for you.
Tip number four is New credit. Are you someone that goes out and just applies to different accounts every time they get an offer in the mail? Are you going to your credit unions, in your banks just opening a whole bunch of credit? Are you – are you doing that? Are you just putting up a bunch of new items on your credit report? Again, what did I say before? Banks and lenders, want to give money to people who look like they don’t need it. And if it’s showing that you have all these new accounts, why do you need all these new accounts especially at once? Do you need it? Are you gambling on the side? Are you hustling on the side? Or you’re doing some sketchy – why do you need it? Why do you need all these new accounts? So this is a systematic process, we want to be strategic in how we go ahead and add credit to our profile, the timing of it. You can’t just be just willy nilly and just apply for everything at once and think you’re gonna do it the right way. You gotta be strategic about this.
And finally, number five your Credit Mix. Your credit mix. Your credit mix plays an important role in the credit score that you have. What does that mean? Well, if you only think that you have when your account is a Victoria’s Secret card, a Best Buy card, and that’s pretty much it. There’s not enough meat on the bones, so to speak. The banks like to see a different sort of mix. They wanna see that you have a mortgage. They wanna see that you pay down on a car note. They wanna see that you have an installment type of loan, which is a loan that you can get from a lot of credit builder accounts, for example, www.moneycodez.com/Self.
So the more that you’re able to show the lenders, that not only do you pay your bills on time but you’re able to pay down all sorts and types of credit like I said car notes, mortgage, credit cards, installments. Doesn’t matter the price points, it doesn’t matter the amount. Anything that you got on your credit report, you’re responsible for. That shows that you are responsible. That shows that you are not a rookie. Okay?
So those are the five things that you need to be mindful of when you’re trying to get that 780 and above. I’ll go over one more time as the recap. Number one – 35% Payment History. Payment history is the biggest thing. Do not miss out on those timely payments. Number two – the Utilization. Do not max out your credit cards. Keep that thing under 30%. Trust me, keep it under 30%. Number three – the length of your Credit History. You need to get that age. And if you don’t have any age accounts, get some authorized users. You may not even have to pay for it. Call your parents, call your family members who do have a great account. See if you can get on their account. Get an authorized user account. Number four – what is the fourth one? New accounts. Don’t just go out and just get a whole bunch of new accounts all at once. You have to time it strategically. You don’t want just all new accounts on your- on your report. You do not want that. And finally, your Credit Mix. I’m not telling you to go out and get a car note, just to add a credit mix. But just be mindful of it. Be mindful that it may not hurt to go out and try to get an installment loan or at least, use one of the credit builder accounts which I have linked below because they report as installments and it actually helps. It actually helps your credit more so than just having credit cards and store cards. Okay?
