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Good day subscribers thank you so much for joining me today on the financial education channel as always i am jeremy and i am here to raise your financial education one day at a time so today we’re going to discuss how to raise your credit score and get a 700-800 credit score something that it’s nothing for you to get a loan because your credit is just outstanding
So we’re going to start at the very base beginnings in this video will be helpful mainly to my younger subscribers the people in their early 20s or still teens because i’m going to talk a lot about how to build credit from nothing but i’m also going to discuss a little bit on how to rebuild credit and those kinds of things in this video let’s get it right into
It so you’re trying to build credit you have no credit you don’t have a credit score what do you do you’re 17 years old you’re 18 years old what do you do well first thing you need to get the job get a job so you have some sort of income then if you have a parent that one they have a good credit score and two they’re willing to put you on a credit card ask them
To do that if they’re not willing to do that or they don’t have a good credit score which is what most people are going to fall into the category of the most people do not have a parent that has good credit score or a parent that’s willing to put them on a credit card those kinds of things so what you have to do you have to get your own credit card since you have
An income of some kind hopefully you have very low bills because you’re still living at home or whatnot and then what you can do is apply for like a capital one credit card a piece-of-crap credit card that charges you like insane interest rates like 23 24 % so what you’re going to do you’re going to charge many transactions on that card but you’re always going to
Make sure you pay off everything on that card on time before it starts to add in that massive amount of interest rate so pay it you four times so you’re getting transactions on there you’re using credit but you’re always paying on time and you’re not adding up that huge interest rate you have as time goes on six months a year later you’re going to be able to go get
Another credit card from maybe a bank maybe you bank at chase or you bank at bank of america wells fargo something like that you’ll be able to get a credit card from one of them at that time because you’ll have a somewhat of a credit score going the interest rate you will probably get from them will probably be considerably lower than what you’re paying at capital
One so maybe you now you’re down to a 14 percent interest rate or twelve percent interest rate so you’re doing transactions with all those cards now and you’re always making sure you pay them on time and you pay them before they start accruing interest so you never have to worry about paying that interest rate so you now you’re paying two credit cards now you’re
Really starting to build a credit score and your credit score is probably going up now to this point you’re probably in the six hundredths after a year maybe even the high six hundredths next step you’re going to want to probably get a car loan because now you’re 20 21 22 years old oh so you can go apply for a car loan at this point and as long as you have income
To meet that you’re definitely gonna have a good credit score on that car loan you’re going to have an interest rate of probably under 10 percent at this point which is great if you can be 21 22 years old and you could be paying under 10 percent interest rate on a car loan that is phenomenal phenomenal that is unbelievable if you can do that but you’ve had have
Been using credit cards for a couple of years paying them always on time and whatnot so now you have a car loan you have the credit cards everything going on time making sure you’re always making your payments on time no late payments you don’t want to get that ding on your credit score and you don’t want to crew all that interest so it’s two-for-one there now
Whenever the time comes you hit your mid 20s or early 30s and you’re ready to buy a home wow you are set because your credit score by this time is in this high 700th maybe even low eight hundreds you have a credit score before you’re 30 that is just unbelievable now let’s talk about if you don’t have a good credit score and you want to climb up that credit score
Ladder well one is credit score we’ll come back over time so let’s say you foreclose on a home or foreclose on a car loan or something like that those can only stay with you for a certain amount of time usually it’s around three to five years and then those get wiped from the credit score by law they have to a bankruptcy i believe is seven years so if you file for
Bankruptcy you have about i believe it’s seven years it’s going to be on your credit score and then even that drops off so in credit you are giving many second chances i’ve known people that have had terrible credit scores and did so many bad things and yet over time their credit score comes back and back and back because you’re given second chances and all that
Bad stuff you did all the money that you know you you wasted of those companies and whatnot it drops off your credit score over time not a lot of people understand that they think once your credits ruined that’s it throw in the cards and i know that’s not the way it works you are always given a second chance or a third chance of a fourth chance so that is the beauty
About a credit score and then you can start building up kind of the way i just said if you’re in your 30s you went through a tough time your credit score got severely damaged you can do what i just said you know get your credit card you know get one bill get a car loan then you get a house loan then your credit score’s right back where it was before or better than
Ever and if you have a significant other a serious girlfriend a serious boyfriend something that you think you’re gonna be with long term hopefully and you want to help build their credit score you can put them on your credit card or put them on your car loan and you both can kind of climb up that that ladder together my wife did that she was way ahead of me as
Far as the credit score goes i was way behind so she started putting me on her credit cards and man did that helped it just helped me a rise and rise and rise and i wouldn’t even really use the credit card she would but i would still get credit for it because i’m on the credit card so that is the beauty and that is how you can climb that credit score ladder one
Last thing i’ll say be careful with the credit just because you have a good credit score and all these people are throwing money at you oh here’s a 30 and all alone that you can get from nothing oh here’s you know a credit card that has a you know fifteen thousand dollar maximum amount you can spend just because you have a lot of credit doesn’t mean go out and use
It think smart with that stuff that’s how you can get in trouble because all these places are going to be vying for your attention and they’re gonna want to give you this credit card in that credit card and next thing you know you’re spending on this one that one this one that one and next thing you know you’re racking up way more money than what you have coming
In for income especially if you get laid off from a job or your business doesn’t start going so good you know well and whatnot holy smokes that is how people get in big-time credit trouble and that’s how you also knew fall where it takes you three five seven years to build back up to where you’re even at so you don’t ever have to do that that’s a warning thank you
So much for watching as always subscribers if you haven’t subscribed you may want to i talk a ton about financial education all types of subjects kind of like what we did here today and you know what guys have a great day and thank you you
Transcribed from video
How to Build Credit – Climbing the Credit Score Ladder By Financial Education