Researching ways to improve your credit score? Duane here with how to build
credit TV and in this video I'm gonna share with you one simple trick that I
used to improve my credit score but before we get started I have a quick
message.
Once again my name is Duane with how to build credit TV. This channel offers
100% free information about how to build credit, how to get cash back actual cash
money using credit cards, as well as credit card reviews. So this sounds like
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notification bell so you don't miss a thing. Okay so in this video I'm gonna be
talking to you about the one secret or the one trick that I use to improve my
credit score. Want to know what it is? It's credit utilization. Credit
utilization which makes up 30% of our credit score. A lot of people don't
really understand credit utilization how this works but I'm gonna explain that in
this video and hopefully you'll be able to use that or experiment with that on
your own and see if this works for you. I know that it's worked for me so here we
go, credit utilization basically refers to how much of your credit you're using. So
if I have a credit card and that credit limit on that card is $10,000. I want to
make certain that I use between zero and ten percent. I do not want to use over
ten percent because if I use over ten percent I'm going to be lessening the
amount that I get as far as the percentage that goes towards my credit
score. Once again it's 30 percent of my credit score so if my current
utilization is 70 percent if I'm spending if I have $7,000 on my credit
card with the credit limit of $10,000 that means I'm using 70 percent of my
overall credit. So my credit utilization would be 70 percent so once again you
want to keep that between 0 and 10% and the reason why you want to
keep it in that category is because when you keep it between zero and ten percent
you're getting more out of the 30 percent that makes up your credit score.
Okay so credit utilization is something that we can actually control.
This is easy. The other huge chunk of our credit score is payment history payment
history makes up 35% of your score. If you've missed a couple payments
in the past you really can't do anything to fix that
other than continue to make payments on time going forward but with credit
utilization it's a lot easier to boost your credit score and boosts it quickly
if you knock your credit utilization from fifty percent all the way down to
zero and ten percent. The the reason why I know this is because I use apps like
Credit Karma I use apps like nerd wallet and it shows me and it tells me what my
credit utilization is and so I was kind of like well what is this I didn't
really know exactly what it was and I just kind of experiment with it.
In those app it tells you that if you're between zero and ten percent that you're
in the excellent category for that particular part of your credit score.
Okay so a lot of people think it's like as long as you're a 30% with credit
utilization you're good 30 percent not bad but it's not maxing that portion
of your credit score. Which once again credit utilization is thirty percent of
your credit score so this is what worked for me I encourage you to try it for
yourself if you have a credit card or several credit cards you just want to
make sure that you are between zero and ten percent. So if I have a credit card
with a balance of five hundred dollars I want to make sure that when my bill
closes that I don't have more than fifty dollars that I owe for that particular
credit card because $50 or less would be between zero and ten percent ten percent
of five hundred dollars is fifty bucks. So that would be an example if I have
another credit card and that limit was two thousand dollars I want to make sure
that when that statement closes that I don't owe the credit card company more
than two hundred dollars because if I did that would be more than ten percent
of my credit utilizatio.n So this simple trick works for me and the reason why it
bumps your credit score so much is because it's 30 percent of your credit
score that is a huge chunk of what makes up your credit score. Alright I hope
that was helpful please be sure to LIKE comment and subscribe. Thank you for
watching this video. Until next time take care and be blessed. Peace!