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How To Get A PERFECT Credit Score For $0



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what's up guys it's Graham here so it

finally happened and we are celebrating

today because for the last nine years my

credit score has never once surpassed

the legendary eight hundred score

I got it once to seven ninety-nine but

it was just never able to break past it

that was until today we did it the

credit overlords have bestowed their

greatness upon thee and my score has

finally passed the eight hundred mark

which by the way is a threshold in which

most people would consider it to be a

perfect score which also means I could

finally make a video about it on YouTube

about how to get a perfect score so

here's why all of this matters in the

first place your credit score is really

just a report card of how well you

handle your money like in school you'll

do well on your exams and tests to get a

good grade but in life you handle your

money responsibly and get a good credit

score and having a good credit score

isn't just something you look at online

and then go and make videos about on

YouTube but you can do that although it

does have a pretty practical purpose

where it could save you a lot of money

and even better it could end up making

you a lot of money having a good credit

score means you can get the lowest

interest rate anytime you want to

leverage your money in real estate and

business or just in life it's how I'm

able to get thousands of dollars back

and free closing costs anytime I

refinance or buy a property it's Halle

gets such low interest rates anytime I

go to buy something that it's

effectively as though I'm just getting

free money it's also how I get approved

for pretty much any credit card signup

bonus I apply for which is just another

way that I get more free stuff so I

promise no actually wait I guarantee

this video could easily save you or make

you a few thousand dollars at minimum if

you actually just follow it and do it

it's not gonna take you a lot of time

it's super easy to do and the best part

about all of this is that it's not going

to cost you any money out of pocket to

get an 800 score so it's entirely free

to do again it's just gonna take a

little bit of your time and all I ask

for in return is a quick like on the

video to help with the YouTube algorithm

and if you're feeling a little bit

generous today maybe just a comment down

below to help boost it up too so if you

wouldn't mind you just don't like and a

comment and that's it otherwise enjoy

the video now first in order to

understand how you can get a perfect

score you've got to understand how the

system scores you in the first place why

said just like you've got a class that

grades you differently for homework

tests assignments attendance and whether

or not you actually smash like button

your credit score grades you want

several different factors as well so if

you want a perfect score you have to do

well on all of them

first is your on-time payment history

and this makes up 35% of your credit

score now this one is incredibly

straightforward just don't miss a credit

card payment and don't pay it off late

ever in order to get a perfect credit

score you'll need to pretty much never

miss a payment otherwise that could ruin

everything now here's how this works and

how it's calculated the credit gods look

at all of your on-time payments and then

divide that by your total payments and

then from that they calculate what

percentage you paid on time now here's

just an example let's say you've had one

credit card for 60 months and you end up

missing one payment that means the

credit overlords take 59 on-time

payments divide that by 60 total

payments and you have a ninety eight

point three percent payment ratio and as

you could see from the Credit Karma

score calculator that puts you in the

yellow which is not good that is

unacceptable

if you want to get a perfect score

however in a different example let's say

you've now had two credit cards each for

sixty months and you end up missing one

payment well now you have a total of 120

credit payments between two credit cards

which means that they take 119 on-time

payments divide that by 120 total

payments between the two cards and that

means you've paid 99.1% on time which

puts you in the green category as far as

Credit Karma is concerned which is a

little bit better and is one more

example let's just say you're brand new

to building credit you have one credit

card you've had it for fifteen months

and you end up missing one payment well

the same calculation still applies you

have fourteen on-time payments divide

that by 15 total payments and that means

you've only paid 93.3% on time which is

bad that's really bad it's in the red

according to Credit Karma which means

you can't pass go you can't collect $200

and you got to go right to jail it's

that bad but that also means that you

could prevent this from happening by not

only just not missing a payments in the

first place but also having more credit

available to you for a longer period of

time so that that way if you do miss a

payment it does end up impacting you a

lot less like having 10 credit cards

open for five years would give you 600

total payments so that if you end up

missing one by mistake it still means

you've paid 99.8% on time which is not

the end of the world now when it comes

to paying off a credit card on time the

really good news with this is that for

them to count it as an on-time payment

you just have to make the minimum

payment every single month which most of

the time is really just like twenty-five

to fifty dollars a month so even in the

worst case scenario if you can't afford

to pay off your credit card bill in full

just make the minimum payment on time

every single month and that will help

keep your score intact in this category

which like I said all of this is the

most important part of your score making

of thirty five percent of what it is

just ask Dave Ramsey besides that the

second factor that makes up your credit

score is known as what's called the

credit utilization that makes up 30% of

your score now in order to get a perfect

score the credit bureaus just want to

see that you're not out there just

maxing out all of your credit cards and

that you're only using a small

percentage of the overall credit that

you have available to you ideally you

want to be spending under ten percent of

your total credit limits showing the

almighty credit gods that you don't need

all the money they've given you because

you're that good with money now if

you're confused here's how this works

and here's how it's calculated let's

just say if a credit card with the ten

thousand dollar limit and you go out

there and you spend six thousand dollars

and then after that you just go and make

the minimum payment well at that point

you do the calculation and you're using

it 60% of the available credit you have

which puts you in the red category here

which is bad and from that you're seen

as a riskier borrowers because you're

carrying a higher balance and that makes

the credit bureaus very angry and

they're gonna lower your score on the

other hand if you have the same one

credit card with ten thousand dollar

limits you spend six thousand dollars

but you pay it off in full when it's due

that means you now zero dollars on a ten

thousand dollar credit line which shows

that you have a zero percent credit

utilization which makes the credit

bureaus very happy and gives you a green

category now there are some ways around

this because it's not the dollar amount

that the almighty credit gods care about

it is the percentage of credit that you

actually use so this means if you have a

three hundred dollar credit line and you

go out and spend $300 that just means

you've maxed out your car

you have a 100% credit utilization and

that's very bad but if you go and spend

that same $300 although this time you

have a $30,000 credit line then that's

showing that you only have a 1% credit

utilization which is really good now one

of the techniques I use to help with

this is just to have a lot of available

credits with all really high limits for

instance right now I have over 12 credit

cards and many of them have over $30,000

credit lines now I'm never ever ever

actually going to spend that much money

but it does help me in the instance

where I go and spend $10,000 or more on

a home remodeling budget and I can still

show a very low credit utilization

because I have so much credit already

available to me now there is a myth out

there that suggests you should keep a

small balance in your credit card at the

end of every month so that way the

credit bureaus have something to report

and this one is false keeping a balance

on a credit card is not going to help

improve your score and if anything now

it's going to cost you more money and

interest so it's always better to pay it

off in full by the time it's due and

never carry a balance on the credit card

ever so for you watching if you want to

get a perfect credit score it's really

important that you try to keep a balance

of 5% or less of your available credit

if it doesn't mean that you can't go out

there and spend more than 5% of your

available credits but it does mean that

you should pay it down before the

statement cycle is over so that that way

the credit bureaus have less money to

report on now in addition to that it

will help you to go and get more credit

cards as counterintuitive as that is to

say because that will help increase the

total credit limit you have available to

you which will decrease your overall

credit utilization and finally I

strongly recommend you ask for a credit

limit increase every 6 to 12 months on

your credit cards this way you're gonna

be constantly lowering your overall

credit utilization and helping to

improve your score so just remember

don't go out there spending more money

just because you have more credit

available to you I think that goes

without saying all of this should really

be done as a tactic to help increase

your credit score and not go out there

buy more things you don't need like this

really cool pinball machine from eBay

and finally one more note I want to

leave off with this one how much money

you keep is a balance on a credit card

it is really only going to be temporary

this is one of those things that's only

going to impact your score until you pay

down your credit card and then your

score will end up going up afterwards so

if you have a high utilization rate

right now or in the short term it's not

the end of the world and your credit

score will reach

as soon as you pay it down third they

say that length doesn't matter but when

it comes to calculating your credit

score it very much does because 15% of

your overall credit score is made up by

the average length of your credit

history this just means the longer

you've had credit for and the sooner you

start the better this is one of the

reasons I highly recommend people to

build their credit as soon as they

possibly can even if it means going and

getting a credit card the day you turn

18 this will build the entire foundation

of your credit history very early on now

it's very important for me to

distinguish here that this is calculated

by the average length of your total

credit history and not the total length

and let me explain that's a save open

one credit card four years ago that

would mean your average credit history

shows as four years but if you opened up

that one credit card four years ago and

then you opened up another new credit

card today your average credit history

would be reduced now to two years

remember because it only takes the

average the same also applies if you end

up closing an old credit line because

some people believe it's a good idea

just to close old credit cards they

don't use anymore this could be really

bad because once you close off an old

credit card even though it'll still show

in your account for seven to ten years

it could lower the average age of your

accounts after that and then you would

have to wait even longer to build a back

up so my recommendation is to first

start building your credit as soon as

you possibly can and keep all of those

accounts and good standing as long as

possible this is gonna help you build up

a solid fortress of long standing credit

history so that when you do go and apply

for new credit it's not going to impact

your account as much since you have a

lot of long-standing credit history

already and because of all of that it's

going to reduce your score a lot less

and when it comes to doing all of this

really the only thing you could do at

this point is just wait this part of

building your credit just takes time so

don't be impatient if you've just got a

credit card and made a few on-time

payments and don't yet have a seven

sixty score patience goes a long way

with this one so sometimes you're just

gonna need to wait this one out and in

terms of how long you'll need to wait

according to the credit karma guide they

want you to have nine years or more of

average credit history to get the best

ranking and even for me my average

account length shows just over four

years because of all of the new credit

I've taken out recently and still it

doesn't make a huge difference because

it only makes up 15% of your total

credit score and I've done every other

category very well the fourth aspect

if your credit score is how many lines

of credit do you have open and this

makes up 10% of your score now this is

one of those things that you would think

makes absolutely no sense like why would

you go and reward someone for going and

opening up more credit cards and taking

out more loans you would think that the

person who doesn't really need any

credit and doesn't have much would have

the highest score right but if you think

that way you would be wrong and here's

why

at first the more credit you have the

higher your credit limit will be which

means the lower your overall credit

utilization is likely to be which means

the higher the score you will have if

that makes sense the second by having

more credit available you're gonna be

able to show more on-time payments which

like I said is going to help increase

your score as well and third having a

mix of credit like having a mortgage an

auto loan and a credit card shows

lenders that you can responsibly handle

different types of debt without

defaulting on them all of this sounds

like pretty backwards thinking and a lot

of it reminds me of the mindset of we're

only going to loan people money who

don't need money because they're the

most likely to pay us back and that by

the way is very true banks love lending

you money when you don't need it and as

soon as you do need the money you're

seen as a higher risk because you need

it so really this is just something you

need to play into it's how the system

works and according to Credit Karma they

want to see you with 21 lines of credit

or more to have the perfect score and

for most people I have a feeling this is

gonna take you a very long time to build

up to but I wouldn't stress about it too

much it only makes up 10% of your score

although I would recommend you aim to

diversify your credit profile over time

because long term that is going to help

you get an 800 plus credit score and

finally fifth we have the last component

of your credit score which makes up the

remaining 10% and that would be the

total amount of inquiries on your credit

report now here's how this one works any

time you go and apply for new credit

it's reported to the credit bureaus and

shows up on your reports is what's

called a hard inquiry

this helps lenders keep track of how

many times you're going and asking for

credit and generally speaking the more

times you're going and asking for credit

the riskier you become as a borrower

this is because lenders are worried that

all of a sudden you're out there going

and applying for new credit cards and

loans and they're concerned that maybe

something has happened that is causing

you to do this like

thinking why did you just get three

credit cards and in auto loan today

are you running out of money are you

going to all of a sudden max it out and

then never pay it again this all seems

worrisome to lenders so therefore the

more hard inquiries you have on your

credit report the lower your score is

generally going to be now in addition to

that if you are out there getting you

credit cards and getting you loans that

is going to reduce your average credit

length history which could end up

further dropping your score as well

that's why so many people end up telling

me that they've just opened up a new

credit card and then all of a sudden

their score drops by like 50 points so

no it was not just the inquiry that did

that it was also the reduction in your

total average length of credit history

that impacted your score as well the

inquiry was really only a small

component of that the good news however

is that all of this is really just a

temporary thing because hard inquiries

only show on your report for the first

two years and they only impact your

score for the first twelve months then

after that they drop off your report and

it's like it never even happened in the

first place the other good news with

this is that if you're shopping around

for an auto loan or a mortgage and

you'll need to run your credit multiple

times with different lenders to get

different rates the FICO scoring method

will generally just group all of those

inquiries together as one and therefore

it's only going to impact you as if you

ran your credit score once so that way

you can go to five different lenders for

a mortgage have them all run your credit

five times and it's only going to count

as you running it once of course as long

as you do it within a relatively short

period of time within just a few weeks

of one another this is to promote rate

shopping for you as the customer without

penalizing you with your credit score

but again this only makes up ten percent

of your overall credit score so it's

pretty minimal but ideally if you're

gonna want the credit karma green score

they want you to have zero hard

inquiries in the last twelve months now

realistically I think having zero

inquiries in the last twelve months is

rather ridiculous especially if you're

out there going and getting like credit

cards and getting bonus points and all

that sort of stuff so I think as long as

you keep it to a minimum and are rather

selective about the new credit you get

you should be fine and also if you're in

the process of going and building up

your credit it's probably best you go

and take out a lot of credit now while

you still can so then that way by the

time you actually need a good credit

score all of this hard inquiries will

have dropped off your report anyway this

is exactly what I ended up doing I took

out a whole bunch of credit as early as

I possibly could when I

knew I was still building up my score so

that that way two years later I knew

when I would need the credit score it

wouldn't have mattered anyway then once

you've done all of the above I have a

few final recommendations first I would

highly recommend you check your credit

score every few weeks using a free

service like Credit Karma or another

really great one is credit Sesame both

are really fantastic resources that

update your credit score every week or

so and even though it's not going to be

exact and it's not going to use the

exact FICO scoring method it's still

going to be pretty close and going to

give you a great representation of how

you're doing credit score wise the

second you could try a technique to

increase your credit score known as

credit piggybacking now this is where

you become an authorized user on a

credit card from someone who has a very

extensive credit history now when you do

that their credit history could report

on your credit account as well and that

might increase your credit score a lot

in the short term you know it's very

important to note that not all credit

card companies will do this and the FICO

scoring method has been cracking down on

people trying to do this to boost up

their scores artificially but I wanted

to mention this because this is

something that can work depending on

your situation and how it's done

no I personally think it's probably

better you just build up your own credit

reports on your own and that way you

have it with you no matter what you

don't have to worry about any of this

stuff but I think if you're a parent and

you want to help out your child look

into doing this and you could help them

out immensely in terms of building up

their credit score just by going and

doing this one little trick

and lastly following everything in this

video staying consistent with it and

keeping very precise with how you manage

your credit will end up helping you get

a perfect score and end up saving you a

lot of money and making you a lot of

money no way will admit having a score

above 760 or so is not going to make a

huge difference like having an 810

credit score is not going to give you a

lower rate anytime you go and get a

house as someone else with a 785 score

and honestly anything above 800 is

really just for bragging rights at that

point so really you should aim to keep

your score anywhere above 760 to 780 and

that will help make you the most amount

of money get you the lowest interest

rates and get you to smash the like

button for the YouTube algorithm if you

have not done that already so with that

said you guys thank you so much for

watching I really appreciate it as

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oh one more thing

go and add me on my second channel to

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and until next time