How to Build Your Credit From Scratch | 7 Methods | 2019

How to Build Your Credit From Scratch | 7 Methods | 2019


Okay, this may shock you I think your credit score is important I think you should have a credit score and you need to build a good credit score. That’s right Not all credit is bad a FICO score is good If you build it responsibly I’m gonna give you seven ways to build a good credit score. That’s gonna help you build wealth Now this may also surprise you I agree and disagree with Dave Ramsey, that’s right He’s the Guru that’s helped thousands of not millions of people get out of debt Heck he’s helped me in my life and our family. I think his teachings are great But I think he sometimes goes too far not all debt is bad. I think there is good debt as well It’s okay to use debt if it’s used carefully and wisely now is there bad debt? Yeah, you bet credit card debt, maybe even an auto loan or student debt We got to get out of that debt use a debt snowball I’m all-in but we need to build our credit score and when you’re young a credit score is extremely valuable Okay, one more point here before we move on. I want to use an analogy. Let’s consider Credit as if it was a gun now as a loaded gun in the wrong hands a very dangerous item absolutely, but is every gun bad what happens if I have learned how to use it wisely safely and carefully and Handle, it properly a gun can be a very powerful and safe tool. Well credits the same way in the wrong hands It’s terrible and there’s a lot of people that should cut up their cards and never use credit again I totally agree and there’s a this is this message that Dave Ramsey gives it’s incredible and it’s life-changing But does that make all credit bad? No, we’re going to need credit to rent an apartment Maybe buy our first home to get an SBA loan to start a business to buy a rental property. I want you to use Large down payments and get credit wisely, but you’re going to need a credit score to do that So we’ve got to use a FICO score wisely to build wealth, okay? Now the first three are pretty tricky and very intertwined So I’m going to list them out together and then we’re gonna break it down. Number one is pull your credit reports That’s an annual credit report.com. It’s free and you should go there to just pull your credit reports and see what’s out there number two is hire a monitoring service and number three is Coaching and education on your credit score credit reports and building credit Now remember number one annual credit report.com. It’s free You want to pull it you could do it once a year and it’s not going to give you you credit score But it’s going to give you what activity may exist on Your credit and it’s gonna be hard to read but you want to pull it and use it as a resource as you move through These other steps now number two was get a monitoring service Lots to talk about here when you get that first monitoring service. You’re gonna get your credit score Let’s start there The credit score can be a moving target and and you need to realize that and not get frustrated by it This is where I’ve learned from my hero and credit reporting Erik counts He’s at credit nerds calm and I quote him in some of my best-selling books What he has taught me is an important point that a credit score doesn’t get you credit But a bad credit score can keep you away from any credit at all So that’s why the credit score matters because it’s not getting you credit It’s just getting you to the point where you can apply for credit another way of looking at it is an Analogy that Erik taught me and that is think if you wrote an essay and you took your essay to three different professors They’re gonna grade it three different ways, right? You’re gonna get three different scores or grades. Well, that’s how your credit score works In fact, there’s 56 different ways. Your credit score can be analyzed So you don’t want to get frustrated you got to remember that the credit score is going to be a moving target and you’re gonna want to build your credit report with good habits and responsibility and that’s what’s gonna Create this this credit picture for different lenders to look at and that’s okay So remember you’re gonna pull those credit reports You’re going to get a monitoring service now it’s off to that coaching and learning now coaching is an important part of these steps because you need the help of Professionals that look at credit reports every day They know how to read these 56 different scores and they can help build your score based on what you need Now sometimes these coaches are paid for separately then the monitoring service Sometimes there’s some they’re included they kind of come together now I like watch my score calm because you get free coaching with it through this credit nurse and Eric counts on his team But again, you find a place that works best for you, but you need that coaching and training places that are gonna teach you what type of cards to get and not to get and Type of loans are good ideas and bad ideas So that’s why I like the coaching in the training a part of these seven steps Now we get on to these other four steps of how to build your credit and more specifically build a good credit report Because remember your score is going to change but you want a quality credit report Now I’m gonna get to the why at the very end of this in a moment But let’s hit these four number four secured credit card You’re gonna hear a lot about this out on the web and basically It’s where you put maybe five hundred dollars with a bank and then they give you a credit card with a five hundred dollar limit You can’t touch the five hundred dollars and the bank feels good about that And so they give you this credit card with a five hundred dollar limit now, that’s good It’s gonna report to your credit reports and your credit score will be affected But it also puts you in a weird world in a bad way. You’re now in this five hundred dollar credit limit world Maybe you want a twenty thousand dollar credit limit someday. Is this gonna help you get there? Because when someone looks at you They’re gonna see you as kind of a $500 borrower not a bigger borrower so it can have some detrimental effects So in summary, you want to talk to your coach and go mmm I get a secured credit card or not and you’re gonna talk about your goals with credit and The coach is going to help you decide on which secured credit card if at all is good for you number five secured loan very similar to a credit card But it’s gonna help you build credit without putting you in that five hundred dollar world of a credit card you’re gonna basically put money in a CD a Certificate of deposit with a bank like a five hundred dollars or a thousand and then you’re gonna borrow against it and make loan payments Now that’s gonna affect your credit score and a good way and it’s gonna report to your credit report But it’s not gonna put you in this five hundred dollar secured credit card world So it’s another way of looking at it and going about building credit and it could be a good choice for you Talk to your coach number six become an authorized user on someone else’s credit And this is the fastest way to build a good credit score and get some good reporting on your credit report But what I’m not talking about is having someone co-sign on your application for credit That’s very different because you still might have that these credit card limit issues What you’re doing is getting a credit card on someone else’s credit That’s had it for a long time has a high limit and it’s almost like they’re coaching you and teaching you responsible credit usage by getting on their credit That’s becoming an authorized user in a great way to build credit now number seven Show responsible use of that credit and this really starts to build up on the why which is the summary of this little video Show responsible use now what this means is Credit cards, that’s right. I’m doing what Dave Ramsey told you not to do get credit cards now Are you gonna go out and max these out? No, are you going to go out and use them for dumb purchases? Absolutely Not the credit card is a necessary evil to build credit We’re not gonna use the credit cards and we’re not gonna max them out We’re just gonna have those two or three credit cards To maybe build some points which isn’t a whole other strategy for those that are really really responsible with credit Topic for another video of mine but we’re gonna be using those credit cards once in a while Common industry use says about every three months use the credit card for a small purchase and pay it off immediately I don’t want you paying a lot of interest pay that thing off right away. See again, Dave Ramsey We don’t want to pay a lot of interest We don’t want to use credit cards ever, but we’ve got to have a credit score We’ve got to have a credit history and a good credit report. So number seven is using the cards Responsibly because that’s what you’re telling lenders. I’ve got credit. I’ve got credit cards, but I don’t use them I keep them in a drawer and I just use them once in a while. What have you done? You’ve shown lenders that you’re responsible. What’s your credit score gonna do? Climb up. That’s the point. Now the why now, why does all this matter it matters? Because I see things I’m a CPA attorney Like I said earlier and our firm helps clients around the country and we do Consultations every day and I myself doing three a day. I’m gonna meet with a thousand clients during the year Do you think I see patterns? You think I seen patterns of success and when clients ask me mark, what are successful people doing well Successful people are using credit wisely and carefully to build wealth and passive cash flow now when I use the word wealth I get it a Dave Ramsey definition of wealth would be completely out of debt even with your home paid off You’ve got your retirement plan You’re putting some money in and it’s going into Wall Street, and you’re getting a decent rate of return You have Social Security and maybe a retirement at work cool that that is a great definition of wealth But are you gonna get the style or the quality of life that you want? is it going to be enough income for what your dreams might be and is that a moderate style of living versus something you dreamed up to do more with charity and and philanthropy more money I don’t know because I have other clients that define wealth as being out a credit card debt and having passive income and Contributing to their timer counts, but they might have a little mortgage on their home with a very low interest rate They might have debt on rental property or a line with credit inside their businesses. They’re growing their business So that’s what I see. I’m not a credit expert But I am a small business Expert to some degree as I help consult clients on these tax and legal and business matters So in summary if you’re trying to build wealth credit your credit score and credit should be an Important part of your equation and I need to say thanks again to Erick counts and the guys over at credit nerds They do a great job and I even call them right before the show It was like I’m gonna talk to about about credit because I have so many clients using it You know wisely and badly What should I remember and what are the facts and so he was so helpful in this so folks I hope this has been helpful. And as many of you are young and building that credit for the first time. Be careful Be cautious keep working and don’t give up Thanks so much for watching that video and I want to be your source for tax and legal strategies It’s hard enough to live the American dream without being out on the web on Google trying to find answers to complex Questions and just click in a mouse hoping you got it, right My team and I want to be a huge resource treatment the law firm accounting firm by Education resources on my site. Please continue to follow these strategies I know the safety thousands now click here if you want to be a part of my newsletter It’s awesome weekly updates and deadlines and strategies and tips also subscribe to my youtube channel You’ll love it and make sure to click the bell icon So you get a little ping whenever there’s a new video and finally check out my site Marjory Kohler comm with all sorts of videos probably 70 plus videos 30 plus hours of content that’ll save you thousands

7 thoughts on “How to Build Your Credit From Scratch | 7 Methods | 2019”

  1. Can you please make a video on tax strategies for high income earners (nt biz owners, just W2 folks). Is setting up a sole prop company to manage family expenses a good strategy? Any others? Thanks a million in advance!

  2. Good video. There are so many things to take into account when starting your credit journey.i started mine late. Even after researching the are things that I would have done differently. But those decisions were based on info that i had and didn't have at that time.i appreciate your effort and energy because you're trying to help.

  3. I would have started with a secured card that has cash back rewards and graduates. (Wells Fargo hasn't yet. 2 1/2 no missed or late payments. )I wish I would have known that starting the card with $1000 or more deposit would also instantly add a few points to my credit score. Also with Wells Fargo when you do graduate that account gets closed and you get a different product. When you get a closed account what happens to that history? Yup. Not good.

  4. BB&T and Navy Federal both have secured cards with cash back. I think TD Bank does as well. I wish I would have known about BB&T's secured card before I signed up with Wells Fargo. The only value is the cards history. If I close the account or graduate the card I lose the history.(i guess that's how they guarantee that they keep your money,so that they can generate loans off of it.)(so from a bankers perspective I guess doing it that way is smart.)(but it sucks as a consumer and credit builder.)

  5. As I get older I realize that I am beginning more and more about protecting myself from my ex and my next.i am completely interested in C Corporations and entities that I can file taxes separately from my personal taxes, and anonymity.Can you do a masterclass on that.(from my understanding S Corporations and LLC'S have, HAVE, to be filled under the owner's tax form. Can a Wyoming C Corp own a Texas LLC without listing the owners name with the secretary of state? In other words, can it maintain anonymity doing business in other states legally, with charging order protection? Thanks in advance.

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