Good stuff. I’ll add one point re negotiating with debt collectors. The law varies by state, but you can revive an old debt (restart the statute of limitations) by making a payment or promising to pay. Be careful not to fall for the trap where you offer an amount to settle the debt, and the bill collector says, “I think I can make that happen, but to show your good faith intentions, send me a $100 payment.” He’s trying to get you to reaffirm the debt.
You can typically get credit cards to remove a late payment from your credit report if you do not have issues with paying on time. Amex does it courtesy once a year or so if you request it
@@CheekyBird790 that's why I have auto pay set up on all my accounts. I typically pay my credit cards once per week to better track my spending. Auto pay is for just in case of emergencies. I have a 60 day late payment from 6 years ago getting ready to drop off. When I went to buy my new car, the dealer said that because the late payment was far enough in the past that it was no longer affecting my score.
I closed two credit card accounts recently in order to increase my credit score. I don't carry a balance on cards so losing the available credit wouldn't hurt me. Each card had 11 months of history which is less than my average credit age. Closing the cards increased my average credit age which increased my score. I only opened the cards for sign up bonuses.
In the short run closing a credit card does not hurt your score if your Utilization is still good after closing the account ( under 10% ) reason is because the card even though closed still reports for the next 7-10 years… assuming you paid the bill on time your go to go!
7:00 - Please note that if both spouses are on the TITLE to the property it will still be counted in both spouses dti when applying for another mortgage. Doesn't matter which spouse is on the mortgage. :)
I feel like Dave Ramsey's "no credit" advice is for people who can't handle credit. I couldn't imagine having no credit. Rental Cars? Mortgage Loans? Cash back? Rewards?
Mr Ramsey has also stated he hates credit cards (especially American Express) and lambastes banks regularly, so he or any of his radio co-hosts will never say anything positive about them.
Due to an bus accident last year where I could not walk for months & was horrible pain 3 of my credit cards were charged off. I hate collection agencies. Is there a way to contact the original card issuers & pay off the accounts & remove the negative items ?
No, once the debt is sold, the originally issuers have nothing to do with it. There is a great book called Your Score that takes you through exactly how it works, i had the author on the show before. You could check that out for an in depth explanation of the best way to approach it
I'm not sure you're correct about the carrying a balance myth. After experimentation my credit score shows as about 30 points higher if I have a very very very low balance vs having no balance. However, that is also based off of the vantage scoring algorithms. It'd be nice if it was more transparent about the differences between the algorithms that are used.
FICO will penalize you for having a zero balance across all revolving accounts. So, you need one account showing a statement balance. Otherwise, it's best to have a zero statement balance month to month-- FICO will also penalize you for having too may accounts with balances. Do a search for AZEO (all zero except one) for more details.
What's funny is... in the stock footage at 0:45 the lady has her magstripe on her card facing the wrong way. There's no magnetic read head fit into that thin plastic guide on the outer side of the credit card terminal. How does she expect the machine to read the wrong side of her card? This is a mistake I notice new Chick Fil A employees make when attempting to load money onto gift cards. A little bit of logic and common sense tells you which side the credit card machine's electronics are.
Mine just dropped 11 pts. Idk how if I’ve paid off my cards on time and I paid them in full. Maybe it’s just sofi because my chase still shows it at 815
I just experienced this myself recently. I always pay my cards before statement/due dates and I allowed a small balance to carry and 1)account showed up as active again even though I have been using the card since I was paying immediately they thought I wasn't which using it. It raised my utilization to 1% and increased my points by 15+ pretty crazy lol. I'm still new to alot.
@@NormUno i do think 1% exactly on all your cards builds your credit score slightly more. But sometimes it good to prove you can payoff a big balance at once sometimes.
I've never under the credit utilization, I know not to keep a balance, and always pay it off, but should I always keep my utilization at 0% or leave it around 6-9%, just not as a interest use?
You want to have a credit utilization from 1%-5%. So I recommend paying some of the credit bill until it’s your payment for the month and then you can pay it in full without interest.
I always thought this was a myth, too...I don't think it matters if your statement is 0% vs 1-5% Just use the card so it doesn't get cancelled and pay it off. I pay mine every night after using it for the day. I guess I'd like clarity on it now though to be sure.
If I am not going to borrow anything for the next 3-6 months then I simply use the credit card to a balance less than 20% it’s credit limit. Then the statement gets generated a few days after the period closes. Then I pay the statement amount in full. Rinse and repeat. If I were borrowing for something (mortgage, car loan etc) I will keep all credit card statements at $0 balance for 60 to 90 days prior to purchase so Debt to Income is lower.
Using 90% of credit limit and paying back 80% before bill date affect credit score? (Utilisation will be less than 10% in this case) SOMEONE PLEASE ANSWER, NO ONE ANSWERS THIS QUESTION.
Needs to be paid back before the statement date, not due date. The card reports to the credit bureaus on the statement date. So pay off 80% before then and it will only report 10%. You can find the statement date on your statement
@@CheekyBird790 that or a thin file, like thin to the point of almost non-existant. I remember a credit check for a Macy’s card coming back at 333 before i had built any credit
@@CheekyBird790 you definitely don’t need 6 months of reporting to generate a score. I had a score of around 650 after 3 months and 2 cards. And i really did receive a credit score of 333 when i had no credit accounts to my name
FICO will penalize you for having all your revolving credit lines at zero balance. You do need to have one show a balance. Also, FICO factors in closed accounts, as long as its reported, in your AAOA. Vantage does not,
You dont need to CARRY a balance though, there is a difference. You can report a balance and pay it off before the due date, but you dont need to carry it to the next month
Honestly when I was first starting out with my credit journey, I actually thought some of these things were true. Did some research and find out a lot, should have about a 750 or higher when this next period comes. Crazy!
Hold on... #8. I have a question, and I know it is situation dependent. However, I plan on canceling 2 cards this year and I am anticipating that this will help my credit score. Factors: 750ish credit score. Longest account 16yrs. Average account length 4yrs. Total credit available = $150k between all cards. My utilization never exceeds 1%. If you are in my shoes, wouldn't canceling 2 cards after their first anniversary increase my average length per account?
Fantastic video & great that you brought up Myth #6 🏆
Good stuff. I’ll add one point re negotiating with debt collectors. The law varies by state, but you can revive an old debt (restart the statute of limitations) by making a payment or promising to pay. Be careful not to fall for the trap where you offer an amount to settle the debt, and the bill collector says, “I think I can make that happen, but to show your good faith intentions, send me a $100 payment.” He’s trying to get you to reaffirm the debt.
You can typically get credit cards to remove a late payment from your credit report if you do not have issues with paying on time. Amex does it courtesy once a year or so if you request it
@@CheekyBird790 that's why I have auto pay set up on all my accounts. I typically pay my credit cards once per week to better track my spending. Auto pay is for just in case of emergencies. I have a 60 day late payment from 6 years ago getting ready to drop off. When I went to buy my new car, the dealer said that because the late payment was far enough in the past that it was no longer affecting my score.
I closed two credit card accounts recently in order to increase my credit score. I don't carry a balance on cards so losing the available credit wouldn't hurt me. Each card had 11 months of history which is less than my average credit age. Closing the cards increased my average credit age which increased my score. I only opened the cards for sign up bonuses.
In the short run closing a credit card does not hurt your score if your Utilization is still good after closing the account ( under 10% ) reason is because the card even though closed still reports for the next 7-10 years… assuming you paid the bill on time your go to go!
Looking to get into real estate in the next couple of years, myth #5 was super helpful. Great video Ben!
My sister just did. Best of luck. 😊
@@Surfer041 Best of luck to her!
Just hit 783. Thanks again Big Ben!
Following your advice about climbing the credit ladder has benefited me greatly! Thanks for the great content
Very informative video and thanks for sharing!👍🏿👍🏿
Thanks for the video. It’s a good summary. But, please remember that marriage is not always between a man and a woman.
7:00 - Please note that if both spouses are on the TITLE to the property it will still be counted in both spouses dti when applying for another mortgage. Doesn't matter which spouse is on the mortgage. :)
Good point
I feel like Dave Ramsey's "no credit" advice is for people who can't handle credit. I couldn't imagine having no credit.
Rental Cars?
Mortgage Loans?
Cash back?
Rewards?
He doesn’t mind you using a credit card to purchase his products. 😄
Mr Ramsey has also stated he hates credit cards (especially American Express) and lambastes banks regularly, so he or any of his radio co-hosts will never say anything positive about them.
Does Smart Credit 💳 use the FICO score or Vantage??
Thank you for the information
Due to an bus accident last year where I could not walk for months & was horrible pain 3 of my credit cards were charged off. I hate collection agencies. Is there a way to contact the original card issuers & pay off the accounts & remove the negative items ?
No, once the debt is sold, the originally issuers have nothing to do with it. There is a great book called Your Score that takes you through exactly how it works, i had the author on the show before. You could check that out for an in depth explanation of the best way to approach it
Wow I thank that now am in a position to understand
Great video as always Big Ben.
Great advice Ben!!
I'm not sure you're correct about the carrying a balance myth. After experimentation my credit score shows as about 30 points higher if I have a very very very low balance vs having no balance.
However, that is also based off of the vantage scoring algorithms. It'd be nice if it was more transparent about the differences between the algorithms that are used.
FICO will penalize you for having a zero balance across all revolving accounts. So, you need one account showing a statement balance. Otherwise, it's best to have a zero statement balance month to month-- FICO will also penalize you for having too may accounts with balances.
Do a search for AZEO (all zero except one) for more details.
Great info brother 🙌🏽
Pay to delete. It definitely works. Got me 75 points.
Mine changes for the weirdest reasons some times but always try to pay in full every month and to stay under 5/24
5/24? how is the rule from chase relevant to your score?
What score is typically used for car purchase loans?
What's funny is... in the stock footage at 0:45 the lady has her magstripe on her card facing the wrong way. There's no magnetic read head fit into that thin plastic guide on the outer side of the credit card terminal. How does she expect the machine to read the wrong side of her card?
This is a mistake I notice new Chick Fil A employees make when attempting to load money onto gift cards. A little bit of logic and common sense tells you which side the credit card machine's electronics are.
i think they did that on strategically to cover the cc and to visually communicate that shes swiping a cc.
Mine just dropped 11 pts. Idk how if I’ve paid off my cards on time and I paid them in full. Maybe it’s just sofi because my chase still shows it at 815
Great video as always
Does anybody know how to get a list of the soft credit pulls?
How do you check your soft inquiries? I didn’t know that was possible and am really curious.
Yes, with a full credit report like the one from Myfico.com (paid) or the free one from annualcreditreport.com
@@TheCreditShifu Awesome, thanks!
Great video as always. But not a good sponsor. I signed up, tried it out, way too hard to set up so I canceled.
Shifu, any advice on how to get out of a credit score plateau? Mine stopped moving after I hit 740. Been 3 months now.
ask fro credit limit increases on cards you have, get your utilization really low
@@TheCreditShifu Thanks, Shifu! ❤️
hello there, there are 28 fico scores
Is it true that nailing exactly 1% Credit Utilization gives you extra points on your score?
I just experienced this myself recently. I always pay my cards before statement/due dates and I allowed a small balance to carry and 1)account showed up as active again even though I have been using the card since I was paying immediately they thought I wasn't which using it. It raised my utilization to 1% and increased my points by 15+ pretty crazy lol. I'm still new to alot.
@@NormUno i do think 1% exactly on all your cards builds your credit score slightly more. But sometimes it good to prove you can payoff a big balance at once sometimes.
I've never under the credit utilization, I know not to keep a balance, and always pay it off, but should I always keep my utilization at 0% or leave it around 6-9%, just not as a interest use?
You want to have a credit utilization from 1%-5%. So I recommend paying some of the credit bill until it’s your payment for the month and then you can pay it in full without interest.
I always thought this was a myth, too...I don't think it matters if your statement is 0% vs 1-5%
Just use the card so it doesn't get cancelled and pay it off. I pay mine every night after using it for the day. I guess I'd like clarity on it now though to be sure.
If I am not going to borrow anything for the next 3-6 months then I simply use the credit card to a balance less than 20% it’s credit limit. Then the statement gets generated a few days after the period closes. Then I pay the statement amount in full. Rinse and repeat.
If I were borrowing for something (mortgage, car loan etc) I will keep all credit card statements at $0 balance for 60 to 90 days prior to purchase so Debt to Income is lower.
Using 90% of credit limit and paying back 80% before bill date affect credit score? (Utilisation will be less than 10% in this case)
SOMEONE PLEASE ANSWER, NO ONE ANSWERS THIS QUESTION.
Needs to be paid back before the statement date, not due date. The card reports to the credit bureaus on the statement date. So pay off 80% before then and it will only report 10%. You can find the statement date on your statement
My score 300 but I still got approved for a new car because I got a good job.
But your interest rate probably wasnt that good?
@@TheCreditShifu 6.5 percent
@@CheekyBird790 that or a thin file, like thin to the point of almost non-existant. I remember a credit check for a Macy’s card coming back at 333 before i had built any credit
@@CheekyBird790 you definitely don’t need 6 months of reporting to generate a score. I had a score of around 650 after 3 months and 2 cards. And i really did receive a credit score of 333 when i had no credit accounts to my name
FICO will penalize you for having all your revolving credit lines at zero balance. You do need to have one show a balance.
Also, FICO factors in closed accounts, as long as its reported, in your AAOA. Vantage does not,
You dont need to CARRY a balance though, there is a difference. You can report a balance and pay it off before the due date, but you dont need to carry it to the next month
@@TheCreditShifu Exactly. People get confused between the statement balance/balance due to avoid interest and the current balance.
Jesus saves. Love you guys.
Thanks
Yay I'm the first comment!!! Keep up the great work. Love your videos
i never understood how closing an old account hurts your score. thats so backwards
If it's your oldest account it reduces the length of your credit history. Also closing old accounts reduces your average age of account.
Honestly when I was first starting out with my credit journey, I actually thought some of these things were true. Did some research and find out a lot, should have about a 750 or higher when this next period comes. Crazy!
This one is funny 😝
Hold on... #8. I have a question, and I know it is situation dependent. However, I plan on canceling 2 cards this year and I am anticipating that this will help my credit score.
Factors: 750ish credit score. Longest account 16yrs. Average account length 4yrs. Total credit available = $150k between all cards. My utilization never exceeds 1%.
If you are in my shoes, wouldn't canceling 2 cards after their first anniversary increase my average length per account?
Probably so, but it sounds like you have a lot of inquiries
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