How To Build Your Credit Score (Step 3)

Researching how to build your credit score? Duane here with how to build credit TV and in this video I'm gonna talk to you about the five categories that make up our credit score But before we get started, this video is the third video in a four part series about how to build your credit score

So if this is the first video you're watching I'll put a link right here and you can click on this link and it'll take you to a playlist and you can watch the videos in the correct order okay So once again this video is going to be about the five different categories that make up our 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 if this sounds like something in which you're interested be sure to subscribe and click the notification bell so you don't miss a thing

Okay so the purpose of this video is just to introduce the five categories that make up our credit score The fourth video in this video series will go in more depth about how to maximize each category in our credit score So the first category that weighs the most this is 35% of our credit score is payment history Payment history simply refers to paying your bills on time So if you pay your bills on time you'll be able to get all points are all portions of this part of your credit score which would be 35%

It's pretty simple all you have to do is just pay your bills on time and you'll get the maximum portion which is 35% of this category which is payment history The next category which is 30% of our credit score is credit utilization Credit utilization simply refers to how much of your credit are you using, so if I had a credit card with a $10,000 limit I want to be between 0% and 10% when my statement closes So you can use your credit card as much as you want but when the statement closes you want to be between 0% and 10% So if I had a credit card with a $10,000 limit I'd want to be between $0 and $1,000 that would be 10% of a $10,000 credit limit

The next category in the credit score is credit history Credit history is 15% of our credit score, credit history is basically referring to how long you've had established credit In order to be in the excellent portion of this part of your credit score which means you would get all 15% of your of this portion of the score you would need to have credit established You need your overall credit age to be eight years or higher so that means that you need to have credit established for a long period of time and you can't like continually get credit cards or apply for new credit So it's not this is not just credit cards this is any kind of credit right

So like if I had a credit card that was five years old and then three years in I applied for another credit card that would lower the overall age of my credit history So in order to maximize this 15% which makes up credit history you need to have credit established your overall page needs to be between eight years and above Okay so this one is one that you can't get all the points in this category without time I mean you just have to wait you just have to have overall credit age and overall credit history for eight plus years The next category that makes up our credit score is new credit

New credit is exactly what that is, it's new credit So new credit is actually 10% of our credit score This is a very low impact on the score but what that means is when you apply for a new credit cards or a new car loan or a house loan or a cell phone or to turn your cable bill on or to turn your light bill on they pull your credit and so in order to be in the excellent category of this portion of your credit score you need to have between zero and two percent I'm sorry zero and to inquiries within the last two years so, like in other words if I apply for five credit cards I'm gonna have five inquiries on my credit report and that's going to lessen the likelihood of me actually getting 100% of this category which is ten percent right 10 percent of this makes up your credit score

So once again it's not a large portion it's only ten percent New credit it's pretty much it's it's a pretty small part of your credit score but this is a part of the credit score nevertheless and understanding every single portion of your credit score will absolutely help you maximize your credit score The last part of the credit score is going to be types of credit this is another 10% Types of credit just simply refers to the different types of credit that we have For example if I have a Best Buy card, versus a Visa card, versus a card from a furniture store, versus versus a house loan this is different types of credit

So this is your credit mix right So this once again is only 10% of your credit score it's a pretty small percent it's not one that I would really worry about like I really got to make sure I have a nice mix of credit otherwise my credit score is not going to be high Once again it's only 10% of your credit score so be sure to check out the last video in this series that's the step 4 In that video I go into more details about every single part of our credit score Which once again there's five categories that make our credit score and I talked about how to really maximize that

I hope this video was helpful please be sure to LIKE, comment, and subscribe share this video with somebody if you find it to be helpful And if you have any questions please leave them in the comment below thanks for watching until next time take care and be blessed Peace!!