Boosting Your Credit Score (a 3 step strategy)

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Having stellar credit has huge perks.

A great score can help you:

- Rent an apartment.

- Get cheaper insurance.

- Get the best home loan.

Unfortunately, besides paying your bills on time—

Getting a high score is often viewed as mysterious.

Building Credit

Building credit isn't taught:

- In highschool.

- While in college.

- While working your 1st job.

Although, it's a massive part of wealth building.

Buying a home and everyday living is much easier with a great credit score.

After spending 10 years in banking.

I came across many credit-boosting strategies.

We're talking a 50 point, 100 point, or 150+ point jump in someone's credit score (in 30 days or less).

Most banks see credit scores like this:

Credit scores are viewed in a range.

619 and under often means limited options (high interest rates).

740 and higher often means many options (the best rates).

Someone with an 800 score may get the same interest rate as someone with a 740 score.

Why?

They're both in the "great" category.

If your credit score isn't where you want it to be (740+ ideally).

Here's a 3 step credit-boosting strategy I often see:

Step 1: Old Credit Card

Knowing someone with great credit is the first step.

Someone that's willing to help you out with an old credit card.

A card that's been open for 9+ years (ideally).

The longer, the better.

Accounts in good standing that have been open a long time help improve your score.

Step 2: High Credit Limit

It's also ideal if the card owner has a high credit limit.

A card with a $15,000+ credit limit (ideally).

The larger, the better.

High limit accounts show banks trust you which can help improve your score.

Step 3: Zero Balance

The last step is to ensure the credit card has a zero balance.

Meaning, the card isn't used much.

If it's used, it's paid off right away.

Keeping a zero balance on a credit card also helps improve your score.

If you know someone with a card fitting steps 1, 2, and 3:

- Old credit card

- High credit limit

- Zero balance

They can log into their credit card account online.

And add you as an "authorized user".

It takes just a few minutes.

I've done it for a few family members myself.

Within 30 days the credit card will show up on your credit report.

I've seen this strategy boost a credit score by 50 points, 100 points, 150+ points many times.

Conclusion

Parents often use this strategy to help build their kid's credit.

It's also common among married people.

Sometimes one spouse has great credit, and the other needs a boost.

If someone's willing to help you and their credit card:

- Hasn't been open 9+ years

- Doesn't have a high limit

- Isn't paid off monthly

Should you still do it?

It's a tough call.

People with the greatest success often use a card that includes these 3 things.

The credit card company will send the owner of the credit card a 2nd card for the authorized user.

But it's optional. 

If you're added as an authorized user.

And you later decide you no longer want to be (maybe the outcome isn't what you hoped for).

You can call the credit card company and ask to be removed as an authorized user.

Here's a helpful article from the credit bureau:

​What is an Authorized User?​ 

You can also get a copy of your credit report and score free:

Experian​ 

Keep building💰

See you next week.