How to hurt Your Credit Score
How To Fix A BAD Credit Score ASAP
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what's up you guys it's Graham here so a
few weeks ago I made a video going over
all of the techniques and tricks that
you could use to get past that legendary
800 credit score all without costing you
any money out of pocket and even though
the strategies work really really well
especially if you destroy the like
button I felt like it would be a good
idea to make a follow-up video to that
for anyone without a good credit score
who wants to know how to turn that
around and fix it as soon as possible so
that means that if your credit score is
under about 680 or so this video is for
you because if you don't make an effort
to get this handled it will cost you
money and no one likes being costed
money just think of it this way if you
don't have a good credit score and you
don't take the time to fix it you're
gonna be charged a higher interest rate
any time you apply for a credit card an
auto loan a mortgage you name it it's
going to cost you more money or they're
just not gonna give you a loan in the
first place and I'm not sure which one
of those is worse so here's exactly what
you could do about it and how you can
fix it even if you have late payments
and accounts and collections and let's
set a good expectation here that none of
this is gonna happen overnight it's not
like you're gonna do all of this and
then tomorrow you're gonna be rolling in
mortgages and loans and money it's that
it's not how it works but I will tell
you that this is gonna help and make a
huge difference over the next few weeks
to a few months and all it takes is a
small amount of effort on your part to
actually follow these techniques and
obviously to also smash the like button
through the YouTube algorithm which
dramatically helps out this channel so
with that said sit back relax and enjoy
the video
the first thing you need to do if you
have not done this already is to run
your credit report and see exactly
what's bringing it down now in terms of
where to start it's really simple a very
quick Google search will bring up a
multitude of sites that will show you
how to run your credit entirely for free
in fact credit Sesame com was the
website that sponsored one of my recent
videos and even though they're not
sponsoring this one they are a fantastic
service and I highly recommend them and
use them myself then in addition to that
you're entitled to a free credit report
every year from annualcreditreport.com
they'll give you actual information
about your credit report that's fully up
to date to every 12 months so pick one
of those options and then begin
reviewing your credit report it was a
quick side note if any website out there
wants you to pay for your report or
score than I wouldn't recommend doing it
there's so many free services out there
that will show you everything you need
to know about
your credit score without spending a
single penny so I wouldn't recommend
spending any money if you don't have to
and there you go I just saved you $9.95
next once you have your report you're
gonna be going through and reviewing it
to find out exactly what's impacting
your score negatively and typically it's
gonna be one of these number one maybe
you just don't have enough credit if
you're just building your credit score
and you don't really have that much
information to begin with then it's not
really likely that you're gonna have a
highest score that quickly if that's the
case go and watch my other video which
I'm going to be linking in the
description and that's going to show you
exactly what to do step by step the
second probably one of the most common
reasons for a bad credit score is I
shudder to say this a late payment or
late payments this is something that
will impact your credit score for seven
years or basically as long as you're
gonna have bad luck if you break a
mirror indoors so I'll show you how to
fix this shortly not the mirror by the
way the credit score I can't help you if
you've got seven years bad luck if you
break a mirror inside but I can't help
at least improve your credit score the
third look to see if you have any
accounts in collections and if you see
this it's it's pretty bad this is what
happens if you've had such a late
payment that the lender just gives up on
you and then writes it off as a total
loss then they go and sell that
delinquent debt to a third-party
collections agency who buys that debt
usually for pennies on the dollar and
usually this is gonna happen once you're
over one hundred and fifty days late on
a payment now forth look for any maxed
out amounts in your credit report this
means that maybe if a credit card where
you've spent up to the available limit
or you're just borrowing as much money
as humanly possible without paying down
the balance know if this is you just be
aware that your total credit utilization
or in other words how much credit you're
borrowing based off the credit you have
available to you is going to make up 30%
of your credit score so maxing out these
accounts is going to lower your score
dramatically if they--if look to see if
you have any foreclosures or
bankruptcies on your credit report a
chances are you should know if you have
a foreclosure or bankruptcy on your
credit report so this should not be a
complete surprise hopefully but there
are instances where identities are
stolen or things are missed reported so
it's certainly worth it to go and check
just to make sure that everything is as
it should and
from there you can figure out how best
to handle that situation to increase
your credit score so in terms of what
you could actually do about all of this
let's start right here with late
payments and this stays in your credit
report for seven years now here's how
this works lenders typically report late
payments to the credit reporting
agencies once they're more than 30 days
late so that means for instance if you
have a credit card payment that's due on
the first but you forgot to pay it on
the first and you pay it on the tenth
then chances are nothing is going to
happen except the credit card company
might charge you a late fee which
they'll almost always waive if you just
call them up and ask them politely to
refund it but after those 30 days if you
still have not paid it then chances are
yes it's going to be showing on your
credit report and in terms of how much
this impacts your credit score it's a
lot in fact you're on time payment
history makes up thirty five percent of
your overall credit score so this one is
a very important aspect to cover and
take very seriously now if you have a
late payment just be aware that the
longer it goes the worse it gets like a
90 day late payment is going to impact
your credit much worse than a sixty day
late payment which will impact your
credit score a lot worse than a thirty
day late payments and so on in addition
to that the sooner the late payments the
more it will negatively impact your
credit score
so if a late payment happened a few
months ago it's gonna be a lot worse
than if that happened five years ago
basically the longer ago it happened the
less it'll impact your score finally the
number of late payments you have will
also play a role in determining what
your credit score is I don't think I
need to say this but I'm gonna say it
anyway because you never know having
multiple late payments is a lot worse
than having just one so if you find
yourself in this position you've checked
your credit report and you see that
you've just been blasted with late
payments and delinquencies here's what
you could do about it
first pay anything off that's late as
soon as possible
like I said it only gets worse the
longer it persists or having a 30-day
late payment on your account is a lot
better than having a 90 day late payment
on your account so make an effort to pay
off your bills as soon as you possibly
can even if they're already late
otherwise if you just leave it alone and
you don't do anything about it
after about 180 days it's gonna be sent
to collections it's gonna be a charge
off and then you're gonna have a really
bad time now secondly it's always worth
it to try to negotiate the terms of the
debt and see if they will adjust your
account back to current this means you
could reach out to the lender and if
you're having a difficult time making
payments
if you might be able to work out a
payment plan the reality is that late
payments are notorious just for being
charged off once they reach a certain
point and then the lender loses a lot of
money so most companies would rather get
something than nothing and would much
rather negotiate the count it as an
entire loss the third if you've already
paid off the debt and it's still showing
on your credit report as a late payment
then it might be worth it just to call
them up and see if they could remove it
as a courtesy now let me make it very
clear they are not obligated to do this
at all but you also know what they say
you could catch more flies with honey
than with vinegar so sometimes it's
calling and asking very very politely
can go a very long way so go ahead write
them a letter see if they'll remove it
and it's absolutely worth a shot you got
nothing to lose the fourth if all of
that fails then look for any
inaccuracies in the credit report and in
the late payment and then dispute it
really quick here's a disclaimer do not
lie ever but if you find any
inaccuracies in the payment do in the
payment dates and so on you could
dispute the late payment as inaccurate
and if the company cannot prove that all
evidence is indeed correct they will go
instead and remove it doing this should
absolutely make a huge difference in
your credit score over the next few
weeks to next few months and doesn't
really take that much time to do at zero
cost to you so once you knock out those
late payments let's go on to the next
one accounts in collections and this
stays in your credit report for seven
years now like I mentioned this happens
when your more than 150 days late on a
payment the bank just thinks well you
don't we're never collecting any of that
anyway so we're gonna be writing it off
as a total loss we're gonna be selling
that debt to a third-party collections
agency for pennies on the dollar and
then it's their problem and that's
usually the point where some third-party
debt collections agency starts hounding
you on the phone saying you owe the full
amount and then starts resorting to
scare tactics to try to get you to pay
it and that collections is also going to
be showing up on your credit report now
when it comes to figuring out how to
handle this there are a few different
strategies now the first thing you
should do is try to dispute it if you
see any errors or inaccuracies like if
you think there's an error on the credit
reporting side and that you paid off the
debt but it's still showing on your
accounts then go ahead and dispute it
then once you file that disputes they
have 30 days to respond on the other
hand if you think there's an error on
the part of the debt collector you could
ask that they validate the debt to prove
it is indeed
that was the money now they're gonna
have to prove the validity of the debt
and that it's actually yours and if they
can't do that it is removed and because
debts like this are often bought and
sold multiple times over those seven
years
there's a good chance there will be an
error along the way that you could see
is and take advantage of and that way
you could have it removed and improve
your credit score the second sometimes
you can ago she ate to pay off the debt
in exchange for removing it from your
credit report now this one is a bit of a
shady gray area because technically if
the debt is true then they should be
reporting it as is but sometimes they
also want their money and they will
agree to remove it if you pay them so if
that's the case here's what you need to
know debt collectors will often pay a
small fraction of what your actual debt
is and then try to profit anything above
that so that means for example if you
have a debt of $10,000 that goes to
collections then maybe that debt
collector bought that debt for $1000 so
anything above that is going to be their
profit so sometimes that means you can
negotiate a ten thousand dollar debt all
the way down to a two thousand dollar
payoff and get it removed from your
credit reports because those debt
collection agencies would rather get
some money and some profit did not
collect anything so again it's always
worth a shot just to see if they're
gonna do this a third we should talk
about paying off a debt collector
because it's another gray area because
technically paying off a debt in
collections is not really going to
improve your credit score even though
it'll now show is paid it's still going
to be on your report that you had an
account that goes to collections and
that will stay on there for seven years
so if this is the case and you did pay
off something in collections then you
could go and file a dispute with the
credit reporting agencies they will then
try to validate that debt from the debt
collection company now at that point the
debt collection company really has no
financial incentive to respond to the
credit bureaus and a lot of the time
they won't even bother responding to it
so that means it will be removed from
your credit report within 30 days now I
do want to mention do all of this at
your own risk and certainly do your own
research before you pay off any debt
collector and always try to negotiate
that debt down and also not before
disputing the debt is actually yours and
accurate and have them verify that the
fourth if you have any maxed out
accounts on your credit report then this
is usually a pretty easy fix the credit
bureaus really just want to make sure
that you're not out there maxing out
all of your credit cards and that you're
only using a small amount of your
overall credit that you have available
to you ideally you want to be using
under 10% of your overall credit limit
so that that way you're seeing is the
safer borrower and therefore you get a
higher credit score so that means if
you're out there just maxing out your
credit cards then well first of all
don't do that but seconds the fastest
easiest fix out there is just to pay
down your credit cards so now you owe
less money that's going to almost
immediately fix your credit score within
the next week or two without anything
else needed from your end but if you
don't have enough money to pay it all
down and this sounds so weird for me to
even mention this as a solution but it
is a solution to go out there and open
up more credit now here's how this works
the credit bureaus don't care about the
dollar amount that you're borrowing all
they care about is how much credit
you're borrowing compared to the total
credit limit that you have so if you
have a $1000 credit line but you spend a
thousand dollars on it then you maxed it
out but if you have a $10,000 credit
line and you spend that exact same
$1,000 then technically you're only
using 10% of your overall credit and
that's good so one of the techniques
that I use with all of this is just to
have a lot of available credit to all of
them with really high limits that's
gonna help lower your credit utilization
and help improve your score all without
paying down any additional money please
I beg you be responsible with this one I
cannot in good conscience go in and
recommend someone who's maxing out their
credit cards just to go and get more
credit so most likely if you have a
spending problem at least acknowledge
that and the best solution for you is
just to pay down the credit cards and
that's gonna be the best for you if you
got a spending problem but if you just
have a low credit limit to begin with
then yes opening up more credit and
using it responsibly will help your
score dramatically so finally let's talk
about the worst from all of them in
terms of harming your credit and that
would be bankruptcy and foreclosure now
here's the thing
bankruptcy is going to stay on your
credit report for seven to ten years and
removing it is going to be very very
difficult if not impossible but as with
anything I mentioned if you can find any
errors or inaccuracies in the reporting
of the information then go ahead and
dispute it and it's worth trying and
also if it stays on your credit report
for longer than 7 to 10 years then
that's also worth disputing the same
also applies to foreclosures which will
stay on your credit report
for seven years if the lender is no
longer in business then also go ahead
and dispute it otherwise unfortunately
this is really one of those things
you're gonna have to work around and not
avoid in most cases removing either one
of these is going to be extremely
difficult unless you find an error so
it's more important to work around it
and improve everything else that will
boost up your score so that that way
this doesn't impact it as much now in
the past I've made a video on this
showing exactly how to build up your
credit from nothing and exactly how you
could do this step by step so instead of
going and mentioning all of that right
here in this video I'm gonna link to
that as well down below in the
description and that's exactly how you
can fix a bad credit score entirely on
your own without paying any third-party
to do it for you the process is fairly
simple it shouldn't take you too long to
do and it's going to help you save a lot
of money any time you apply for an auto
loan a mortgage a credit card and
basically anything you need to borrow
money or for anything they need to run
your credit score for this is going to
help you dramatically and again all I
ask in return is that if you found it
helpful then at least just hit the like
button it does help out the channel
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you guys thank you so much for watching
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