There’s a ton of different credit monitoring services. You have your Vantage 3.0 and you’ve got the FICO, and a lot of people ask me this one question.
This one question probably gets asked to me more than any other question in credit, and that is, “What is a great FICO score?”
What I want to do today is kind of share with you with some statistics that I think are very important. Some are extremely sad, viewer discretion is required.
The first thing I want to share with you, and I’m going to give you a couple of tips.
I’m going to give you four tips at the end of this of things you can do to raise that FICO score. That is the most prevalent scoring model that’s out there right now.
Let’s first talk about statistics and understand that 60 million people suffer in America today because they have a low FICO score. 60 million people can’t do what they got to do.
25% of America has a score of less than 600, so that’s 75 million people.
What are you guys doing? 75 million people.
There are hardships, I get it. Some things go on that cause lower credit scores, but I preach this day in and day out to get in your ear so you guys can take action.
Understand that there are things you can do to raise it very fast.
I’m going to share with you those four things here in a minute that probably you’ve never heard of before.
I bet you’ve probably never heard of them before, how to raise your score as fast as humanly possible.
I want to share with you that the average person, almost 25% of American has used a payday loan or cash advance.
Have you ever used a cash advance or a payday loan? Do you know what you’re paying in fees when you guys are using those things?
25% of America, think about this guys, 25% of America has used a payday loan, which is probably up in that 30% interest rate.
Or a cash advance, which is right up there in the 20s and 30%.
Do you know what you’re paying in interest? I talked about this in some earlier videos, how you guys are paying almost double the amount for a mortgage payment.
Almost three times the amount for a car payment, just because you’re willing to settle for a low FICO score, and it’s not your fault.
It’s the information that you’ve been given.
Information is great, but if you’re given the wrong information, how do you fix it?
You’ve been taught your whole life. Maybe you didn’t have the parents that had great credit.
They don’t teach us in schools, they don’t teach you how to manage your finances and how to raise your credit score in school.
No school teaches that zero, so you have to rely on channels.
Information from people that are doing this day in and day out.
That’s why we bring this channel to you, so you guys, every single day can learn something new.
The more you focus on it, on anything, you become a master. 10,000 hours on anything, you can master a craft.
When you do this day in and day out, it becomes a master. I want to bring you guys the latest news, the latest tricks and hacks, and things.
That way you understand what you’re doing, how to raise this FICO score.
Understanding that a quarter of America can’t get a government loan, can’t finance a home, can’t finance a new vehicle, can’t get credit cards if any over $500 to $1,000 and credit limit, that’s sad!
It’s very sad to me that this is what’s going on. I’m going to give you a couple of tricks that I want you to take right away and start implementing into your credit that you can use.
These tricks are things you’ve probably never heard of before, maybe you have.
I want to share with you the first tip and that is that, did you know that you can remove things from your credit report?
You guys all know this, where you can challenge information that is negative on your credit report.
Did you know that you can add positives? I don’t mean in the form of tradelines, in terms of authorized users.
What I mean is, wouldn’t it be nice considering that 35% of your credit score’s based on payment history, to have an opportunity where you can put positives on your credit?
Let me give you an example.
Your rent payment for the last couple of years, that’s not being reported to the credit bureaus, your cell phone bill, your electric bill.
These are things that are positives.
If 35% makes up your score, do you know what’s going to happen to your FICO when you start reporting that data to your credit bureaus?
You’re like, “What, Mike, how do I do that? I don’t own a reporting company. I can’t report data.”
That’s why you guys got to know about Rent Reporters and you got to know about Rental Kharma. They will report the payment history that you’ve been making all those payments on time for your rent or your mortgage onto your credit bureaus.
Just contact the people that you’re making payments to every single month.
You have nothing to lose and say, “Will you report this information to the credit bureaus?” Rental Kharma and Rent Reporters are one you can rent that.
You also have got the Experian boost.
You’ve got the ways that you can report the electric and the phone bills.
This is all things that if you’re making payments on time, call them up and say, “Hey, report the data.” That’s trick number one, that is a positive.
Number two, and you’ve got to realize this, that the second biggest thing is your credit card utilization.
There’s a lot of controversy over how do I pay, which card do I pay first? Do I pay the highest credit limit one? Do I pay the one that’s maxed out the most? Do I pay the lowest one?
What I have found is if you’ve got credit cards, the easiest thing to do, and this is strictly from personal opinion, and also what I’ve done, is I started with the lowest credit limit first.
There’s a reason for that. You have to protect momentum and mentality.
Meaning, let’s say you’ve got a credit card, $500 credit limit, $1,000 credit limit, $5,000 credit limit and a $10,000 credit limit.
They’re at 50%, 60%, 70% utilization.
What you want to do is start with the lowest credit limit first. Again, there’s controversy on this because people say we should start with the highest.
Some people say to start with the lowest.
What I’m telling you to do, is start with the lowest credit limit and here’s why.
You have the lowest credit limit, let’s say your card is $1,000. You’ve got $800 on that card right now out of $1,000.
What is your utilization? That’s 80% utilization. It’s crushing your score.
What I want you to do is start with that card first. Attack the lowest credit limit, the $1,000.
Don’t attack the $10,000, because number one the $10,000, if you owe 70%, 80% utilization on it, that’s seven to $8,000 in payments that you’ve got to put on that card for it to even get into a position.
Now, the way that FICO registers your score, is it’s card specific.
If you’ve got one card that is 40% utilization, like the $10,000 one and you’ve got 80% on a $1,000, that one is hurting you more, the lower one.
It’s also getting you momentum, it’s called the snowballing effect.
Paying your $1,000 credit limit that’s got $800 on it, getting that paid down first, putting it aside, and then moving on to the next one.
That’s going to help you out tremendously. Again, you’re going to get momentum.
Once you get that first one paid off, you’re like, “Man, I just paid off that $500 card.” Done.
We’ll move it aside, don’t touch it, and then you go up to $1,000. “I just paid off that 800 bucks on that $1,000 card.”
Boom, pay it, move it, don’t touch it, and then work your way up.
Start small, the smallest credit limit, pay those off, move them aside and then start working your way up.
You want each card to be under 10% preferably, and I always told you number seven is a lucky utilization where I want you guys to be at for most or almost every card.
If you’re at 7% or under, you are in great shape for utilization, which contributes to 30%, excuse me, 30% of your actual score.
Now, also you guys got to find out your closing statement date.
The reason for this, find out each card has a different closing statement date.
What that means is, that is the date that they report to the credit bureaus.
Just call them up and say, “Hey, what is my closing statement day? When do you guys report to the credit bureaus?”
You don’t care so much about the due date.
The reason for that is if you can pay off your card or pay down your card when before the closing of this, each card has a closing date different.
If you can pay off your cards before the closing date, that’s the data they’re going to report to the credit bureaus.
You want to make sure you find out that date for each card.
Call them up, “What’s my closing date?” Make sure that you pay off the card before that.
If not, you’re going to carry a balance and you may not even know it. You’ll carry a balance every single month.
You’re like, “I paid it off,” but it’s not being paid off because you’re paying it before the due date.
You don’t want to pay it before the due date.
You want to pay before the closing statement date of each card. A little trick of the trade right there.
Note: Only revolving credit accounts have a closing statement date.
Now, I get it that you guys get these pay, first, you pay off your $500, then you pay off your $1,000 card and you’re feeling really good.
Now you’ve got a $10,000 card and you’re like, “My guy, I don’t know what to do here, because there’s no way I’m going to be able to pay off $8,500 on a $10,000 card.”
Here’s a little trick you can do.
You can add a high limit credit card tradeline. This is something we can help you with.
You’ve got most of your stuff paid down, and you’re feeling good. You’re like, “Man, my score’s going up, but there’s no way I can attack this one.”
If you put a high limit tradeline on, it’s going to take the factor of that credit limit.
Let’s say it’s $25,000, if we added a $25,000 credit limit to your credit report, that’s going to put in $25,000 of new credit with very low utilization.
It’s going to take that into the factor of your credit utilization and average it out, so boom.
Now we just put on $25,000 of new credit.
What do you think is going to happen to that debt on that $10,000?
The overall debt that you had starts to fall apart and starts to lower significantly. This is a very effective two-pronged approach.
Let’s say you get to that point, you can’t do it.
Let us know, we could help you put on a tradeline that will offset utilization and drop it significantly.
Number four is this, and this is cool because a lot of families don’t know about this.
Maybe you have a teenager, 15, 16, 17, 18, 19, whatever.
Or this is, I’m talking to millennials, or I’m talking to people that just went through bankruptcy.
Or I’m talking to people who are just going through credit repair and they’ve got a clean slate. They’re like, “Look, I’ve got a clean slate, but I don’t want to wait a couple of years to get history.”
Remember, to get history, it’s a month by month process and making payments on time. Lenders like to see age.
Remember that the age of an account trumps credit limit.
Age trumps credit limit!
The credit limit is great, but the age of your account is a disability to it.
When lenders see that you’re making payments on time for a long time, they love it. They want to see that you’ve been making longterm payments, that way they can trust you and finance you for more stuff.
If I’m out there talking to a millennial right now, or I’m talking to parents that have kids that want to say, “You know what, I want to put my kid in a good position, so they can start going into college.”
Or maybe they’re in college and you’re like, “I want to help you out because I don’t want you to go through what I had to go through.”
Or you just went through credit pair and you’ve got a clean slate.
Or you went through bankruptcy and you’re like, “They wiped everything and now I have nothing, and I’ve got to start with a secured card.”
No, you don’t. There is a fast track. You do not have to start with a secured credit card, and that is adding tradelines with age.
Think about this for a minute.
You can put a tradeline on that’s got over seven, eight, nine years of age on it, so you don’t have to wait that seven, eight, nine years of history of making those payments.
It’s called an age tradeline.
By adding a few of those, even starting with one, that’s going to dramatically increase your credit score fast.
Also, it’s going to give you the age.
When you apply for your primary accounts, not only are they going off the age, but they’re going off the credit limit of that line, and this is going to dramatically increase your chances of getting approved.
We could always add age, and if you need help with that, we also do that here as well.
I want to go over those few tips, make sure you just start, like I said, start by reaching out.
Get those positive added that you didn’t know you could, Rental Kharma, Rent Reporters, getting your Experian boost done.
Getting all that positive stuff that you’ve been making payments on, get it reported to the credit bureaus as 35% of your score.
Then tackle the lowest credit limits first, start attacking those.
If you get to a point where you’re like, “I can’t get to some of the bigger ones, add a high limit tradeline, so offsets that utilization.
Then make sure you get your statement dates on each card and pay your debt off before that date, not the due date.
Lastly, if I’m talking to a millennial, if I’m talking to somebody who just went through credit repair and they’ve got a clean slate, or maybe you just went through bankruptcy or maybe you’re just like, “I’m brand new to credit. I don’t have a whole lot of age.”
This is going to dramatically increase your chances of getting approved for better stuff. We can add an age tradeline for you, to help you out dramatically.
If you have any questions about this, please post it.
Every single day I’m bringing it to you, to make sure you guys are successful in the credit game that we talk about.
Then learn the craft of credit.
Post comments below if you have questions. We do our videos based on that, and again, thank you for watching Tradeline TV.
My name is Mike, and until tomorrow, take care.