So your credit score is one of the most important numbers in your life. Frankly, i wish they taught more of this in school, and i wish more people were educated about this, but just in case by fate, you happen to stumble upon this video you're in for a treat. What i'm gon na do in this video is talk about exactly what you need to know in order to get your credit score in tip-top shape. I'm sure that most of you guys watching this video at some point in your life, you want to have your own home or you want to live independently, maybe in your own apartment or condo, or you have that dream car that maybe one day you want to Drive, if you don't have a good credit score, all of this is going to be very difficult and you're going to find yourself paying extra money on these purchases, understanding what a credit score is and how you can get a perfect credit score and what you can Do to climb into that 800 club mark is extremely important, so in this video you're going to learn everything you need to do just give me about 10 to 15 minutes of your time, and i'm going to be providing you some excellent free value in this and All i ask for return is to drop a little like on the button down below that actually helps out this channel tremendously, and it also allows this video to get pushed out and helps other people out as well, so other than that.

Let's get straight into this video and let's talk more about the basics of credit and then get into what you should know on how to improve your credit score. So what is a credit score in simple terms? A credit score is just a number that determines how well a person is able to borrow money and then pay it back. This score ranges from 300 to 850 and if you have a friend that has a score in the 300 range run from him, if he ever asks you to lend him a dollar a nickel or a penny, you are never gon na see that money. Back again, this is pretty much how the credit scoring system works in the united states when a lot of these banks and institutions are trying to give money out to the people, they will look at your credit score.

They will run your credit just to make sure how good you are at paying back money that you borrow. So what makes up a person's credit score in the us. We have three different credit bureaus. We have transunion, equifax and experian.

Now, on top of that, we also have something called the fico score and the vantage score. I know these are a lot of terms and a lot of things you don't have to know all of it fico is going to be the most important one. So if you take out anything, learn how to get a good fico score because they are the most relevant, they are the most used and about 90 of other lenders will pull from your fico, which gives them a better idea of your overall credit history. So sometimes you'll find your transunion score being like 800, while your actual fico score is maybe 720 or 730.

These variety of scores will always range. So what you need to really know is that they all have their own scoring models, but, at the end of the day, these companies just focus on how well a person pays back the money that they owe. So how do you have a good credit score? The easiest way for us to do this is to break down what factors actually go into this and we're going to be using fico. Like i mentioned so for 10 of this pie, they actually have new credit, and this actually refers to the amount of credit cards that you open in a short period of time.

Every time you open a new credit card, you will have your score, getting impacted temporarily with a hard or soft pull. This doesn't affect you that drastically. You won't find your score tanking, that much and if it does it's not because of the new credit aspect, or this factor, it's actually going to be because it increases that length of history that we're going to talk more later on in this video number. Two is going to be the credit mix, so if you just have three credit cards all with one lender, you're going to find yourself not doing so well in this category.

But if you're someone who has credit cards, you have an auto loan. You have a mortgage and you're spread out with the type of variety in lending that you've been doing. You can find yourself doing well in this category. This accounts for 10 of your credit score as well, and not many people actually focus on this because, generally, for the most part, most people are going to be pretty well diversified with the amount of loans that they have now.

For the third thing, this is going to be the length of history which is going to be about 15 of your overall credit score. So the longer your credit history has been the better your score is going to be, and this is actually one of the most important tips and tricks in trying to go from a 700 credit score into the 850 range. This is really where it makes a big difference, because lenders want to see how long you've been having those credit cards for and how long you've been paying it off consistently. For this is why it's so important to get started with your credit card journey as soon as possible.

I always recommend, as soon as you turn 18. As soon as you start of age, get a credit card right away. There are people who start getting credit cards when they're, 25 or 30, and you don't get to build up that length of history within your accounts when you start that late. So if you're trying to have a good score, make sure you look into getting a credit card as soon as possible.

I've also made videos on this channel. Talking about the top five starter cards, i recommend in trying to get started with your credit card journey. So if you have any children, if you have any siblings or if you have any friends that are pretty young, they don't have to use that credit card, but definitely open it. So it actually starts creating that history onto their account.

So for number four. This is going to be total debt and utilization of those accounts. So what this means is, if i only have one credit card under my name and that has a ten thousand dollar limit, i wan na make sure that i don't spend all ten thousand dollars of it. I wan na stay under that two thousand dollar for me.

Personally, i like to be under the ten percent mark generally, even under five percent. For that credit card utilization every month you use more of that credit card. You may actually see your score drop a little bit. They want to see that you do have a high limit, but you actually don't choose to use all of it now.

There are little ways to get around this if you have a charge card, if you automatically deduct these things before that statement hits you can find yourself avoiding that utilization rate on some of these cards, but generally the ways to get around this without having to do Much work is to just get higher credit limits on your cards. I have also made a video on this on my channel on how to get higher credit limit increases for your credit cards, and that is another way on how you can increase your credit score. So for the fifth one we actually have payment history, and this accounts for 35 of your overall credit score. Having a good payment.

History is one of the most important things you could have on your credit card if you've ever been late on a payment or if you've ever defaulted on it, it's gon na hurt you pretty badly. This all ties in with the overall credit score, but just make sure that you have a good history of payments that you've applied for that card. You don't always have to pay off the full amount, but that is something i recommend you to do. Do not be paying off the minimum balance on these credit cards if you're trying to get a perfect score.

Look into managing your finances in a direction where you'll be able to pay off the full amount every single month in order to have a good score and maximize the rewards that you get with certain credit cards. If you want to increase your payment history aspect of your credit card, which is a large fraction of what makes up your overall credit score, make sure you just pay off your bills on time and make sure that you reach out to other credit lenders, be real. Nice about it reach out and see if they can work with you see if they can reduce the apr, see if you can sign up for another card transfer that over onto a no interest apr card, so you don't have to spend more money on interest. There are other ways to get around this see if you can work out a payment plan with other credit card issuers.

This is very important, but it comes down to the simple fact where, if you want to have a good score, you just need to make sure that you're paying off your bills on time and you're not carrying this type of credit card debt. So if you want to join the 800 club, follow this easy formula of three things: one pay every bill on time: student loans, auto loans, your mortgage, your rent, your credit card bills, your cell phone bill; anything that has your name on it. If you've ever co-signed. For anything which i don't ever recommend you to do, because you never know what type of situation you're going to get stuck in and if your family member or your close friend decides they don't want to pay off their bills or they're in some type of weird Funky situation in them not paying off their bills.

You don't want that to reflect onto your own personal credit report. So that's probably one of the things that you focus on and you can find yourself getting a pretty decent score. On top of that, you want to make sure that your credit card utilization is kept to a very minimum amount, do not exceed anything more than 30 of your overall credit limit, keep your spending low on your credit cards, and if you find that it's getting a Little bit higher than normal pay it off a little bit early and make sure it's not reported to these credit bureaus on top of that, the biggest thing is make sure you do this consistently having a good to great to excellent. To perfect credit score is not just about how well you do these things, it's about how long and consistently you do it for so just because someone has an 850 credit score, it doesn't mean that they're doing any better or they're paying off their bills in a Faster way, they've just been doing this for a much longer time.

So what separates people from the 850 to the 720 mark is really just time, and it takes time to build these things. I'm not going to talk too much about it in detail in this video, but there are something called trade lines piggybacking and authorized users that i will make a follow-up video on on how you guys can instantly improve your credit score. This video talks more about the basic fundamentals that you need to know in your everyday lives in order to grow your credit score over a very long period of time, but if you're trying to do this more instantly more quickly, i'm gon na make a separate follow-up. Video after this, so if you want to raise your credit score, just follow these tips that i've created only spend what you can afford.

If you know that you want to buy something and you can't afford it, please don't put yourself in that position where you have to pay off credit card debt. It is not worth putting your credit score at risk. Wait for it save up that money. Pick up a side, hustle pick up another job, but please do not be paying credit card interest on the purchases that you're trying to make.

I'm trying to look out for you guys, i'm trying to save you guys a lot more money here. This is not something you want to do. This is not the direction you want to take your finances. Paying interest on these purchases are never the move.

Number two. You want to be more strategic about the credit cards you apply for. Please do not go mindlessly applying for every credit card offer that you see in the mail or you see an advertisement for you want to be strategic about it and just like any other brand, there are good companies and bad companies and with credit cards you want To make sure that you're with the good companies and not the ones that are going to charge you any sneaky late fees or or have a very difficult time with you, if you ever need to call them up, you want to be able to use these credit Card companies, in a way where they're gon na work with you, my personal favorite ones, are chase, discover and american express those are credit card companies that i personally use that have always treated me very well as a consumer and in the past, when i've messed things Up where i forgot to pay my bill, they've done things where they've actually waived that or they've looked out for me or they they hit me up if they're, some type of security fraud. I like working with companies that treat me good, and everyone should have this mindset as well.

This is our money if we use their credit cards, they're making money off of us, and they are nothing without the consumers and without our money so be very careful about the cards that you decide to apply for and be strategic and smart about which credit cards You decide to add onto your name last but not least, make sure that you have fun with your credit. If you do have a good credit score, know that you have a ton of bargaining power, you can find yourself getting more application approvals and you can find yourself getting some pretty good interest rates now, if you're on the more financial literate side of things, you will Also understand the term of leveraging other people's money. So, if you're able to get these decent interest rates on whatever purchase or loan that you're getting and you're able to reinvest your money and put that into different aspects where you know that money is actually making you even more money, you can find yourself really utilizing This and coming out, on top with the benefits and the advantages of having a good credit score, simply put you just have the ball in your core and if you have a bad score, the ball is not in your court. The ball goes into any lender.

That you're trying to work with when you have a good credit score, you can negotiate so many more things you can choose who to go to and you can decline working with other institutions, and that is a lot of power. You save more money at the end of the day and in the course of a lifetime just having a good credit score, which is free knowledge and it's just free easy practices that you can do. You're gon na go a very long way. So if you're trying to eventually be a millionaire or you're trying to be in a position where you don't have to worry about money or if you're trying to be in a position where you can get your new car or your dream house instantly without having to Fight anyone on it or without having to go through any speed bumps just have good credit by following the principles i mentioned in this video, but guys i hope you enjoyed this video.

Thank you all so much for watching. Don't forget to watch my other videos on this channel talking about what you can do with that good credit score, because once you get an 800 plus credit score or once you have a good enough credit score, you can find yourself getting accepted for cards traveling the World for free - and that is all the material that i've taught on this channel. So if you guys are interested in leveraging that good credit once you're able to get it watch, binge watch go through all my videos, because i teach you exactly what you can do completely for free on how to maximize the rewards. So, thank you all so much for watching this video, if you did enjoy, don't forget to like this video comment down below and subscribe.

If you enjoy this content. Thank you all so much for watching and until next time, peace out, you.