Simple Steps To Rebuilding Credit 2022 - YouTube
https://www.youtube.com/watch?v=tbQ8VPRpb7A

Transcript:
(00:03) [Music] what is that my friends welcome back to the wallet monkey channel where we give you all the credit intel you need to grow your wallet now we've got like this little rebuilding credit series going on here i think it'll end up being somewhere between three to five videos i don't really know where this one's gonna fall hopefully this falls in the beginning so that the rest of the uh the videos make sense but anyways what i want to talk about and discuss is you know i've been on this credit journey
(00:25) myself as well and i went from a 460 to a 760. the goal originally was 800 the goal was originally to have 100k liquid on revolving credit cards i might change that i might turn my focus now and get more involved in business credit cards now that i've accomplished pretty close to what i wanted i'm not really sure so anyways just kind of going with it for now but what i wanted to share with you is a lot of the mistakes that i made rebuilding my credit i've seen others now probably hundreds of other people
(00:53) now at this point it seems to be these really bad ideas that are perpetuated through society that are just kind of these idioms and these ideas right that just for some reason spread out and they kind of suck and so understand that a lot of this stuff that you're hearing about that that seems to be like this common knowledge of rebuilding credit a lot of it's wrong first off and it is the slowest way for you to actually rebuild credit okay so i've shot videos about this on the past in the past rather but legitimately you could just
(01:20) focus on utilization and building relationships and you would get further than 99 of people trying to rebuild their credit right now lower your utilization to one percent focus on building relationships secured cards secured savings accounts high yield savings accounts money market accounts whatever pledge loans on navy fed and you would do better than 99 of people insane right okay let's dive in so things to focus on i think there's seven points here keep utilization being reported low five percent or less and
(01:46) you notice how this is the first one these aren't in order per se but i would definitely say that this is the most important one um especially when you got like low limit cards 200 cards 500 cards keep it low across the entire revolving profile outside of personal loans keep this to five percent or less one percent would be ideal that's really where you want to be turn key cards you want to keep long-term what do i mean by this churning right what i mean is that with a lot of these cards when you get them
(02:14) you need to for the first two to let's say four months you need to go max them out then pay them down pay them down before the statement date and obviously you don't want those balances sitting on there and have to pay interest on those because a lot of these cards that you've got are really bad interest rates you're in the subprime category when you're rebuilding in deep subprime category so we want to churn these so just focus on one at a time probably because i'm assuming expenses might be tight and the
(02:36) amount of free liquid capital that you've got is lower right so that's what we want to focus on and again going back when i was in that position what do you know income was also an issue do what you can with what you got okay next is we want to get secured cards and build up savings accounts at key banks we want to do long term business with these are like um for example if you want to get into amex there's there's probably very little chance unless you're 680 or above and you got a decent credit profile are
(03:04) you gonna get into amex and your shot there your best shot would be to get one of the co-brand uh cards like the delta card or something like that right the co-brand cards have a different underwriting mechanism or system at least it seems that way and they're easier to get with a lower lower score meaning like 680 690s we're at the top end of the subprime getting into the good category right on the fico end so those are the accounts that you want to set up you want to set up money market savings accounts
(03:31) certificate accounts high yield savings accounts like if you're having troubles getting into the amex ecosystem you could get into their debit card you could get into high yield savings account you can do the same thing on the business side i mean they've almost got unlimited ways to get in there now and amex whether they admit it or not does use an internal tracking profiling scoring mechanism of some sort all the big banks do you got to just assume that at this point it's just navy fed that's
(03:55) publicly talking about it or publicly allows you to know it rather okay so also understand the secured credit card and a lot of the better institutions will mature at six to eight months get a secured card at these locations and just let it build up right leave it alone like navy fed's a great example you can go and get a 200 secured card and in six to eight months you can have that graduate into a cash rewards that's the green card for two thousand dollars seen it time and time and time and time again
(04:21) people still got baddies on their accounts they still got bankruptcies they still got all kinds of stuff going on okay next build transactional history with again with the institutions you want to get cards with you hearing the repetition once again like that's literally all we talk about on this channel so transactional history just shows that we're transacting with this institution we've got these savings accounts over here we're doing direct deposit we're doing regular savings accounts like you name it anything that
(04:46) you're doing and moving money around between these accounts into the bank itself are all counted as transactions and that's what we want to really build up because we want to show that we're serious and we want to do business with them but also too the deeper reason here is that they are tracking this all right leverage as many soft pole high quality cards as possible to get more available credit the more available credit you've got it the easier it becomes to keep your utilization down if you want to
(05:12) somewhat use these cards because i mean if you've got just a bunch of 500 200 cards it's really hard to keep utilization to one percent let's let's all agree on that right we want to leverage and this is kind of like leverages many soft pull high quality cards usually you don't have high quality cards that allow soft pulls very few but again that's that's where we want to put our focus so that the the shots that we are firing we are making sure that they've got the best accuracy
(05:35) and so that would be doing lots of research making sure you know checking the accuracy of the soft pole trying to see if we've got a match with credit engines or recommendation engines on the um credit karma side wallet hub side and other sites like that if we're getting a pre-qualification in there and then we're going to the website we're getting a pre-qualification well to me that is more substantial than you know one or the other i tend to try and stack up as many data points like that as i can and
(06:02) then i'm making that decision and pulling the trigger right like do we wait for the next statement date to hit you know do we have intel on where they're pulling in terms of credit bureaus if they do pull should we go freeze that account so that we ensure that there's no hard hit regardless if it's a fluke or something messes up right like those are the things the data points we want to know so that we can take the proper actions so we can get the best possible result like i'll give you an example you can lock down your
(06:25) transunion with the goldman sachs apple card and they'll just soft pull it and you'll still get approved so that's a card where you can it's a soft pull all the way through and if you accept the offer it's a hard pull usually but even if you've got your trans union locked people still get approved for that card every single day okay so great example there uh next you want to no matter what i know there's going to be a poll for this because you need money and again we're a lot of times we're looking at
(06:50) this wrong right we're looking at it with the wrong mindset we're looking at this like free money and we shouldn't i talk about that in another one of the videos you want to tune into that if that's already been published then we'll link a card here stay away from payday loans stay away from collateralized loans where you have to put up your car you got to put up your house note you got to put up something wild and wacky like that to get some sort of subprime two thousand dollar five ten thousand
(07:12) dollar loan understand that as soon as you get your score up into the low 700s you're already going to get such a better rate you're going to probably they're not even going to ask you for proof of income they're not even going to ask you to put up collateral on that loan so just wait if you're especially if you're in the 680s 690s just wait you're so close in the 500s i sound crazy to you but understand that if we tackle these things that i'm giving you in this list our score is going to see a
(07:37) huge jump utilization is a big one utilization you can see anywhere from a dropping down from 30 percent to you know sub 10 you can see anywhere between a 50 to 70 point jump and that is a much bigger jump than what you're gonna see if you get a bankruptcy removed it's just how it is so stay away from that stuff it's just like especially subprime and deep subprime like loans and specialties and these companies you've never heard of before oh my god who knows what the actual rate is is this an
(08:02) amortized loan as well like your house to where you end up paying hundreds of percent of interest over time because it compounds so you know these are the things that you want to watch out for right and you being in a vulnerable state you being in a desperate state is not going to help so we got to make sure that we're always tackling this stuff with a clear head yeah lastly ditch the store cards i know that there's the shopping cart trick and all these threads in the forums and stuff are constantly popping up and being
(08:25) populated about how to get these store cards without a hard pull or if you just put in the last four you're social it won't hard pull but sometimes it does depends on if it's community or synchrony right just why bother the only caveat i'd say here is if it's a place that you shop often then that's a card that you should get but i would argue that you should get it later because if you get it now and you start it off with a 200 or a 500 balance they might sandbox you and so a lot of these really great cards that you want
(08:55) to get if you're not careful and you get it too early they will sandbox you and what sandboxing means is that your your account is just never going to get a credit limit increase or it's never going to go over a thousand or two thousand dollars no matter what you do you could max the card out every single month for two years straight and pay it all down and they're never going to give you a credit limit increase whereas if i would have just gotten no card and then came three months later four months
(09:16) later and i'm now in the 700s i could have gotten a 510k card and there's no sandboxing issues there's no notes on my account that's again that's another dirty little trick that they do that most people don't know about is that they'll do things like that capital one is notorious for this um discover kind of does it but you know even i've had experiences to where i just kept a higher balance on the card and i finally paid it all down two months later they gave me they doubled my my credit line i
(09:39) would say the worst one out of all of them is a capital one and again i assume that subprime cards are even worse because those cards cap out at fifteen hundred to two thousand dollars that's the most you can ever get out of those cards so why even bother all right anyways that's all i got for you seven quick things that you can focus on right now if you're rebuilding your credit you know you want to improve your score so if you feel like i missed something or you just want to add something to the
(10:01) conversation talk about your personal experiences i'd love to hear from you in the comments below if you want this video to get in front of more people click the like button and if you're brand new here and you love personal finance credit stuff like us then stick around hit the subscribe button the bell notification turn it all and be on the lookout more videos coming soon [Music]