what's up you guys it's grahe here so this is absolutely unbelievable I never thought that this would happen I'm about to C okay I'm not about to cry but to my utter amazement I was kind of shocked this morning when I checked my credit report and my score increased to a record of 847 which no joke is one of the highest scores that I've seen like just for some context your f8 credit score maxes out at 850 but I've never actually met anybody who's been able to achieve a perfect score under the age of 65
years old or so so besides me being slightly bitter that I'm only three points away from achieving credit card Perfection I thought it would be fun to break down and go through my entire credit report discuss exactly how I was able to do this and then go over some of the tricks that you could use to achieve something similar because I got to say this is a lot easier than people make it out to be there are so many shortcuts out there that most people don't even know exists and there are some out there that
will literally pay you to take advantage of them or I guess you could also just keep watching if you're curious how deep in dead I am because uh yeah that's also on my credit report although before we start if you appreciate me breaking down my own finances and putting it all out there it would mean a lot to me if you hit the like button or subscribe if you haven't done that already doing that helps out the almighty YouTube algorithm it's all I ask for and as a thank you for doing that here's a picture
of a puffer fish so thanks so much and also big thank you to policy genius for sponsoring today's video but more on that later all right so before we go through my own credit report as a bit of a background here's how your score is broken down the first and largest factors based on your ontime payment history and this makes up 35% this just means that you always pay your debts on time as a greed without ever being late or missing a payment now keep in mind that this part doesn't require that you pay off
your bills in full it's just that you make the minimum payment and as long as you do that you'll pass the second largest factor is what's called your utilization rate and that makes up 30% of your score this calculates how much credit you have available versus how much of it you actually use so for example if you have a $1,000 credit line and you use all ,000 of it that's 100% utilization which is bad but if you only use $100 of it that's 10% utilization which is good third we have the average age of your
credit which makes up 15% of your score overall lenders see that the longer you've had your accounts open for and in good standing the better the chances are that you're going to be an experienced borrower who's going to pay on time this also means the sooner you start the sooner your score could go up and the longer you keep your accounts open for the more established your credit file is going to be to give you an even higher score then fourth we have the types of credit that you have which makes up another 10% of
your score this means that lenders want you to have experience handling multiple types of loans just to prove to them that you can handle different aspects of debt this might include having a lease payment a mortgage student loans credit cards you name it the list goes on honestly you should never go and purposely take out a loan and borrow money and pay interest for the sake of building credit but in a way depending on what you do it can work and finally five the remaining 10% of your score is based on the number of hard
inquiries that you have see anytime you apply for a new line of credit it shows as a hard inquiry on your report and lenders see that the more inquiries that you have and the more credit you're applying to the riskier you're seeing as a borrower since you're out there trying to seek new lines of credit and in doing so your score ends up dropping temporarily that's why essentially by knowing this information we could take advantage of it by always paying off your credit cards in full always paying them on time having multiple types of credits
keeping those accounts open for as long as possible keeping hard inquiries to a minimum and then no matter what hitting the like button and subscribing if you haven't done that already but if you want to take this a step further and literally get paid to do all of this here are the secrets that credit card companies don't want you to know but before we go into that let's go through my own credit report and here's what's in it look for a little bit of context when I first started doing this I was 21 years old
I had never opened up any credit in my life and I kind of thought that using credit cards like this was completely pointless but when I went to several Banks to try to get a mortgage to be able to buy a property back in 2011 every single Bank rejected me because I didn't have a credit profile despite me having consistent income two years worth of tax returns and six figures saved up in cash in the bank ever since that moment I realized that it was in my best interest to build my credit score if I
want to play and win the game of Building Wealth and now 13 years later here's exactly what it looks like as you can see since 2012 12 I've had zero late payments ever zero accounts and Collections and zero derogatory public records next we have the amount of debt or utilization in my case I'm using between 0 to 1% of my total available credit so this would be like somebody having a $100 balance on a credit limit of $10,000 and when you look at the utilization rate even further you could see that I have $38 charged
on a total personal credit line of $161,000 now I'll admit when it comes to this one it's it's completely unnecessary but I have a habit of just paying off my credit cards in full before they're even due anytime I see a balance of like more than $0000 I guess it just bothers me to see something owed and anytime I see an amount that's not zero just my OCD kind of kicks in a little bit it's not bad but I like round numbers so when I see anything above a zero I just like I just pay
it off I know it's ridiculous you don't have to do that but that's also why a lot of my utilization is very low consistently from there though we had the average age of my credit and this one was probably the most difficult for me to overcome because I was not able to piggyback on someone else's credit to get their credit line which is something I'll cover shortly as a shortcut to be able to cut down a lot on the amount of time needed to do this but beyond that this was just a lot of patience
as you could see my oldest account is about 12.6 years old and my average account age is just over 8 years old from there you could see that 10% of my score is calculated by the amount of new credit that I've received which is because I opened up a credit card just over a year ago because there was a really good sign up bonus and I couldn't resist so that's resulted in a new line of credit and also a hard inquiry finally though we have the last one and that would be credit mix and here
I have eight revolving credit card accounts in a total of 13 of which six have been paid off in full and then there's the big one $3.8 million worth of Mortgage Debt which is spread across six rental properties thankfully all of these are fixed for 30 years at or below % which means I'm never going to pay it off early and I got these rates do in part to having a good credit score to begin with so if you would like to do something similar and get a great credit score as fast as possible and
maybe even get paid in the process to do so here's precisely what you came for but before we go into that it's important to realize that even though building your credit is step one to building a solid financial future step two is making sure you could actually keep it while ensuring that your loved ones are properly taken care of in the event that something where to happened to you for example what most people don't realize is that 41% don't have the life insurance coverage they need 80% of Americans overestimate the cost of life insurance and
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quotes for free and see how much you could save thanks so much and now let's get back to the video all right so in terms of what you could practically do to increase your scores fast as possible here's what I recommend number one apply for a no annual fee credit card the reason behind this is that the longer your credit cards remain active the longer your history is going to be open and the more established your average account age is going to be since these are going to be the cards that you should in theory
just keep open for as long as you possibly can to build the foundation of your credit it helps if they have no annual fee to be able to save you a substantial amount of money as an example of this some of my first credit cards were the Bank of America Cash rewards card Discover card and a random Credit Union card which cost me nothing but on the other hand had I signed up with my first cards that cost even $25 a year each that's $900 spent over the last 12 years completely unnecessarily so if you
don't have to spend the money don't spend the money also if you want specific examples of the cards I like the most the Bank of America Cash rewards card is great the Discover It secured card or the Wells Fargo active Cash Card all three are fantastic I'm not sponsored by them I don't get paid by them I get nothing in return I just personally like them there you go the second always make sure to pay off your balances in full by the time they're due I know all of this seems common sense but never carry
a balance on a credit card and don't spend money that you weren't planning on spending anyway I treat every credit card purchase as though it's cash just coming right out of my account and if I can't afford to pay it off immediately afterwards I don't put it on the cart it's that simple but you know what full disclosure if you're the type of person not to handle credit cards responsibly or charge them up because you can then I highly recommend instead just put a recurring charge on One credit card like a Netflix subscription Costco membership
phone bill you name it cut up the card and destroy it and then just set it to autopay so that it automatically pays off in full by the time it's due it's the same thing like having a debit card except you're able to build credit without actually spending more money on the credit the third once you've done this successfully for 6 to 12 months go ahead and apply for another credit card I know this sounds counterintuitive but the more credit cards that you have the lower your overall utilization is going to be the more positive
trade lines get reported and the higher your score can go like just consider that if you have a credit card and you pay it off in full on time every single month for for a full year that's 12 positive trade lines but if you have two credit cards and then you pay both of them off on time for the full year now you have 24 positive trade lines and that helps boost your score next fourth after about a year of doing this you could apply for rewards cards like the American Express gold even though this
is certainly not necessary to build a good credit score certain credit cards could be used in such a way that not only pay for themselves but also turn a profit meaning you could make money from this and as long as your credit score is above 720 or so you have a really good shot at being approved I'll cover some of the best reward credit cards later in the video but just know around this time you could start taking advantage of some really incredible offers after that though fifth continue adding new lines of credit again this
one is not required to have a good credit score but it does help if over time you add different lines of credit that could be a mortgage a lease payment a student loan a personal loan an auto loan you name it now obviously you don't have to go and take out loans just for the sake of taking out loans to build your credit because doing all of this can be done without paying a single sent in interest but it does help to have different types of credit for whatever that's worth and six once you've done
all of the above just wait for the most part if you just follow the above steps after about 2 years you should have a credit score that's high enough to get approved for almost anything that you want to get but you know what I will say if you want to speed up the process a little bit faster there is a way to cut the line and there's also a way to fix a bad credit score if you're not currently happy with where it's at so this is exactly what what to do one if you don't
have enough credit but you want to increase your credit score as fast as possible you could do this by becoming what's called an authorized user this is what happens when someone else with an extensive credit history adds you as an authorized user on one of their accounts and when that happens sometimes their account will show on your report this term is also known as credit piggybacking because you're able to get the benefits of someone else's high score without doing all the work yourself typically this is something I would recommend parents do with their children or
if you have someone you explicit L trust and you want to help them out this is a way to do it on top of that you don't even need to give the card to another person for the benefits to apply as long as you're just added as an authorized user it's shown that it could boost your score an average of 22 points however there is a bit of a catch when it comes to this and the biggest one is that not all credit cards will report to all three credit bureaus as of now it appears
that Capital One Discover Bank of America and dwells Fargo are credit cards that will often report to the other users credit history but of otherwise if not it just appears as though you've opened up a new credit card and it kind of defeats the purpose that's why you really got to do the research ahead of time to make sure the account history will actually transfer over to you the second because all of their history gets transferred to you that also includes the bad if they have any late payments or maxed out credit lines second you
should also pay off your credit card balances so that that way your utilization is below 10% I'd say for most people this one is probably going to have the biggest impact in the shortest amount of time possible remember the amount that that you owe known as your utilization rate makes up 30% of your score so if you have a high balance that is the one thing that could easily bring you down quite a bit this is why I'd always Advocate paying down your balances in full as often as possible third you could also use a
product like Experian boost to improve your score see like I mentioned earlier a large portion of your credit reports is based on your ontime payments total account history and types of credit that you receive but instead of having you go and open up new lines of credit Experian boost is a totally free optin service service that goes through your accounts and then tracks ontime phone and utility payments by adding them as a positive trade line to your Experian credit file doing this gives you more positive trade lines and more credit history that could theoretically boost
your score next the fourth thing that you could do is remove any late payments or delinquencies from your account remember anytime you miss a payment or it gets sent to collections that stays on your report for 7 years and absolutely demolishes your score but not all hope is lost if you have any sort of late payment of any kind on your report just be aware that it only gets worse the more time goes on so a 90-day lay payment is significantly worse than a 60-day late payment which is significantly worse than a 30-day late payment
and so on that's why you should always make sure to pay it off as soon as possible even if it's already late fifth if you find yourself getting blasted with collection notices it's usually worth it to try to negotiate the terms of the debt to bring it back to current this means that you could reach out to the lender and if you have trouble making the payments see if you could work out a payment plan the reality of this is that late payments are are notorious for being charged off and sold to third parties for
pennies on the dollars so it's in their best interest to work with you to get something back versus nothing alternatively if you've already paid off the debt but it's still on your credit report weighing you down just reach out to the lender and see if they will remove it as a courtesy they don't have to do this but sometimes just calling and asking goes a long way and finally if all else fails just look for any inaccuracies in your report if you find any inconsistencies with the amount that is owed the dates owed and so
on you could report it and if they can't prove Beyond a reasonable doubt that that debt exists with the terms that they specified you could have it removed doing this should absolutely help your credit score out tremendously in a relatively short amount of time usually just a few hours and if you're curious where I'm optimizing my own spending here you go to start for the longest time I used to have a few go-to cards that I'd use on a regular basis with the first one being the Chase Sapphire Reserve at the time I signed up
for this back in 2016 there was an offer out there for 100,000 bonus points when you spent $4,000 in the first 3 months so that's what I did I was in the middle of a renovation charged some materials to the car that I would have spent anyway and that gave me $1,500 back in travel a $300 Airline Credit $100 towards TSA pre-check and priority pass access from there though I did the same thing with the American Express gold card I found an offer for 80,000 points when you spent $4,000 in the first 3 months and
since I had renovation charges that I would have spent anyway I put it on the card this gave me another $1,200 worth of benefits for a $250 annual fee of which at the time was free for the first year I then repeated this with the American Express Platinum Card which I believe gave a 100,000 points when you spent $6,000 in the first 3 months I prepaid some insurance charges on the card that again I was just going to spend anyway and by doing that I got another $2,000 worth of value for an annual fee of
at the time $595 oh I was also able to do this with the American Express business platinum card and prepaid some business expenses to be able to hit the minimum amount got the points and wound up getting over $1,000 worth of profit for just like a few minutes worth of work really over the last 12 years I have done this with the JP Morgan Reserve card Chase Inc Preferred Bank of America Cash awards card AMX SPG card Amazon Prime card Chase Sapphire preferred the listco on today though even though I'm not as fanatic about trying
to optimize every single purchase when I go and travel I tend to use the JP Morgan Reserve card or the AMX platinum card for the benefits and purchase protection when I go out to eat uh dining and food tends to be the American Express Gold Card Chase Inc preferred for internet services business expenses and lift Amazon Prime for Amazon it's a lot to keep track of sometimes so if you're the type of person who just wants Simplicity if you're a Robin Hood Gold Member honestly your gold credit card has an option for 3% cash back
which is really really good otherwise the city double cash rewards card is 2% cash back on everything the AMX gold is still good for most purchases and Amazon Prime makes makes a lot of sense for people who are Amazon Shoppers certainly this is not for everybody but if you want to put in a few minutes of research to do this it could financially be very worth it and lastly I just want to say this as a word of caution since data breaches are becoming a lot more common for practically anything that you do online and
also in person if you're not actively applying for credit please freeze all three credit bureaus of Equifax experion and Transunion all three agencies allow you to do this in a few minutes for free online when you make an account and this prevents anyone else from opening up new lines of credit in your name even though this isn't too common it happens way more than you'd expect and it's so easy for someone to open up a new line of credit charge it up to the Max and then leave you with the Bild to try to prove
and deal with it this is why credit is something I take extremely seriously and because I'd rather be safe and it takes a few minutes and it's totally free I recommend just automatically freezing your report when you're not using it I'll even do everyone a favor and just Link in the description all three credit agencies and some resources that you could learn from it's all super simple to do and if you're not applying for credit just have it frozen done hopefully you found all of this helpful and if you appreciate the information again just hit
the like button subscribe write a comment for the YouTube algorithm I really appreciate it thank you so much and until next time
