Video · Brian Kim
How to Fix Your Credit Score Fast!
Brian's playbook for raising your credit score quickly — what actually moves the needle for the FICO bands most lenders gate on.
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Published on YouTube January 8, 2024 · 21:05 · Text on this page updated · About 11 min read
Key points from the video
- Check your credit reports regularly. Brian says one error, a fraudulent charge sent to collections, cost him heavily, and his score jumped more than 100 points overnight once it was disputed and removed.
- Ask for higher credit limits so you use a smaller share of your available credit, unless you have trouble controlling your spending.
- Pay every bill on time. A late payment stays on your report for seven years, but your score starts to recover once you pay on time again.
- Keep old credit cards open, because closing them shortens your history and raises your utilization. The exception is a card you don't use that charges an annual fee.
- Limit hard inquiries. If you shop for a loan, do it within a short window so the inquiries count as one, and open new cards when nobody will check your credit for a while.
Summarized from Brian's own words in the video.
What's changed since this video
Video published January 8, 2024. Checked against current sources on October 13, 2026. These updates are from the ClearValue Lending Team, not Brian.
- Free credit reports Still current
In the video: You can get a free copy of your credit report from Experian, Equifax and TransUnion.
Now: Still true, and more often than once a year. All three bureaus have permanently extended free weekly reports at AnnualCreditReport.com. Federal law still guarantees one free report from each bureau every 12 months.
Source: FTC — Free credit reports · as of
- How common credit report errors are For comparison
In the video: The Federal Trade Commission says 25% of Americans have errors on their credit reports.
Now: The FTC's 2013 study found that one in four consumers identified errors that might affect their scores, and one in five had an error on at least one of their three reports. That study is still the FTC's most-cited figure; it is from 2013.
Source: FTC press release on its credit report accuracy study (February 11, 2013) · as of
- Rate-shopping window for hard inquiries For comparison
In the video: Several hard inquiries in about two weeks count as one inquiry.
Now: FICO groups inquiries for mortgage, auto and student loans made within 14 days (older score versions) or 45 days (newer versions) into one. FICO lists this treatment for those loan types only, not for credit card applications.
Source: myFICO — Credit checks and inquiries · as of
- How long hard inquiries count Still current
In the video: Hard inquiries stay on your credit report for up to two years.
Now: Still true. FICO adds that hard inquiries affect FICO Scores for only one year, even though they stay on the report for up to two.
Source: myFICO — Credit checks and inquiries · as of
- Cost of carrying a card balance For comparison
In the video: Bring your credit card balances down; the bureaus make a big deal about them.
Now: The average APR on credit card accounts that paid interest was 21.19% as of Aug 1, 2026, per the Federal Reserve. Paying balances down helps your utilization and saves that interest. See today's rates.
Source: Federal Reserve G.19 credit card APR (FRED TERMCBCCALLNS) · as of
- Credit repair companies Still current
In the video: Companies that charge to fix your credit are usually a rip-off; you can dispute errors yourself for free.
Now: The FTC agrees on the key points. Credit repair companies cannot remove accurate, current negative information. It is illegal for them to charge you before they help you. Anything they can do legally, you can do yourself for little or no cost.
Source: FTC — Fixing your credit FAQs · as of
Reader guide · ClearValue Lending Team
How to fix your credit score: the step-by-step guide
Brian went from a bad credit score to 846 out of 850. In this 21-minute video he shows his own credit report, then walks through the habits that got him there. This guide follows the video in order, one section per tip, and adds what you need to know today. Each section ends with a note on what has changed, with the source and the date we checked it. If you are reading this because you want business funding, the last section explains how your personal score fits in.
How a credit score is built
Brian covers this in the video · watch from 0:00
Brian opens his credit app and shows an 846 from Experian. He has zero late payments, uses about 1% of his available credit and carries about $900 in card balances. His oldest card is 19 years old. The only thing holding him back from a perfect score is two recent hard inquiries for reward cards.
A FICO Score is a three-digit number from 300 to 850. FICO calls 670 or above good, 740 and above very good and 800 or higher exceptional. Your score is calculated from your credit reports, which list your accounts, balances and payment history as reported by lenders and card companies.
FICO publishes how much each part of your report weighs. Brian uses the same five factors later in the video.
| Factor | Weight | What it measures | Brian's main tip |
|---|---|---|---|
| Payment history | 35% | Whether you paid past accounts on time | Pay every bill on time |
| Amounts owed | 30% | How much of your available credit you use | Raise limits, pay balances down |
| Length of credit history | 15% | Age of your oldest, newest and average accounts | Keep old cards open |
| Credit mix | 10% | Cards, installment loans, mortgages and other types | Don't open accounts just for the mix |
| New credit | 10% | Recent applications and new accounts | Limit hard inquiries |
Tip 1: Check your credit reports and dispute errors
Brian covers this in the video · watch from 1:56
Brian's score was damaged by a fraudulent charge that went to collections. When he disputed it and the bureau removed it, his score rose by more than 100 points overnight. His lesson: check your reports regularly, because nobody else will.
You can see your reports from Equifax, Experian and TransUnion free every week at AnnualCreditReport.com. Checking your own report is a soft inquiry. It does not affect your score.
To dispute an error:
- Get all three reports. An error can appear on one bureau's report and not the others.
- Write down each mistake. Note the account, what is wrong and why.
- Dispute with the bureau. Explain in writing what is wrong. Include the bureau's dispute form if it has one, and copies of documents that support your case. Most bureaus accept disputes online.
- Dispute with the business that reported it. Send the lender or collector a letter naming each error and why it is wrong, with copies (not originals) of your documents.
- Keep records. Save copies of everything you send and the dates.
- Wait for the result. The bureau generally has 30 days to investigate. It must send you the results in writing and, if your report changes, a free copy of the new report.
Brian does not pay for credit monitoring. He relies on the free alerts his bank and card companies send. That is a personal choice. If you find fraud, report it at IdentityTheft.gov. A credit freeze is free, does not affect your score and stops new accounts from being opened in your name.
He also warns about companies that charge a lot to "fix" your credit. The FTC says they cannot remove accurate, current negative information, and it is illegal for them to charge you before they have helped you. You can file the same disputes yourself.
Brian quotes the FTC as saying 25% of Americans have errors on their reports. The FTC's study, from 2013, found that one in four people identified errors that might affect their scores, and one in five had an error on at least one report. It also found most score changes after a fix were small: about 1 in 20 people saw a change of more than 25 points, and 1 in 250 more than 100 points. Brian's jump is possible, but it is not typical.
Tip 2: Ask for a higher credit limit
Brian covers this in the video · watch from 4:03
Utilization is the share of your available credit that you are using. Brian's example: you owe $900 on a card with a $1,000 limit. That is 90% utilization, which looks risky. If the limit goes up to $10,000, the same $900 is 9%.
So Brian asks his card companies for higher limits often. His warning is just as important: if you struggle to control spending, don't ask. A bigger limit only helps if the balance stays the same.
Before you ask, check with the card issuer whether the request will be a hard or soft inquiry. A hard inquiry can lower your score a little for a while, which works against the goal.
Tip 3: Pay your bills on time
Brian covers this in the video · watch from 4:03
Brian admits he skipped bills when he was young, sometimes to make a point with a company he was unhappy with. The accounts went to collections and his score collapsed. His advice: don't withhold payment to prove a point. Dispute the charge instead and keep paying what you owe.
A late payment can stay on your credit report for seven years. Brian notes that being 60 or more days late hurts more than being 30 to 59 days late. The good news: your score does not stay low for seven years. It starts to recover as soon as you build a new record of on-time payments.
Simple ways to stop missed payments: set up autopay for at least the minimum on every card, put due dates on your calendar, and ask your card issuer to move a due date if it falls before payday.
Tip 4: Bring your card balances down
Brian covers this in the video · watch from 4:03
The bureaus pay close attention to credit card balances, so Brian says lowering them is a quick fix. It also saves money. The average APR on card accounts that paid interest was 21.19% as of Aug 1, 2026, according to the Federal Reserve.
Brian has a separate video on paying off credit card debt. Our guide to that video covers the methods step by step: how to pay off credit card debt.
Tip 5: Don't close your old credit cards
Brian covers this in the video · watch from 7:33
Closing a card you no longer use can hurt you in two ways. You lose that card's limit, so your utilization goes up. Over time you can also lose the age that card adds to your history.
Brian answers the two usual reasons for closing a card. If you switched to a card with better rewards, keep the old one open anyway. If you worry about fraud, put the old card away and don't carry it.
His exceptions: close a card you don't use if it charges an annual fee, since that is money for nothing. And some issuers may close a card that sits unused, so he suggests putting a small monthly subscription on it or using it now and then. Pay that charge in full each month.
Tip 6: Becoming an authorized user
Brian covers this in the video · watch from 9:03
An authorized user can use someone else's credit card account. Brian mentions this idea because people often suggest it, but he never did it. Asking a friend or relative to add you to their card is a big request, and he finds it unrealistic for most people.
If someone does add you, two facts matter. Card issuers usually report authorized users to the credit bureaus, so the account can appear on your report. And an authorized user generally does not owe the debt; the account holder does. That also means the account holder's late payments or high balance can show up on your report.
Tip 7: Stop hurting yourself with hard inquiries
Brian covers this in the video · watch from 9:41
A hard inquiry happens when a lender checks your credit after you apply. Sometimes you can't avoid it, for example when you need a mortgage. But if you are trying to raise your score, don't apply for credit you don't need.
Brian says hard inquiries stay on your report for up to two years. That still holds. FICO adds that they only affect FICO Scores for one year. Soft inquiries, such as checking your own report or a lender reviewing an existing account, do not affect your score.
Payment history: 35% of your score
Brian covers this in the video · watch from 12:34
In the second half of the video Brian goes through each factor. Payment history is the biggest. It includes your cards, auto loans and mortgages, plus collections and bankruptcies. Lenders want to see a track record of paying on time.
Brian's rule of thumb: paying 100% of bills on time is excellent, and below 90% is below average. The captions lose part of his "good" range, so we don't repeat it. FICO does not publish these bands; they are his guide.
His own history shows the point. He had late payments years ago and still reached a super prime score by not making them a habit.
Amounts owed and utilization: 30%
Brian covers this in the video · watch from 12:34
Utilization is the second-biggest factor. Using a high share of your available credit can signal that you are stretched, so lenders see more risk. Lower is better.
| Rating | Card utilization | Length of history | Hard inquiries in 2 years |
|---|---|---|---|
| Excellent | 0% to 10% | 25+ years | 0 |
| Good | 11% to 30% | 8 to 24 years | 1 to 2 |
| Average | 31% to 60% | 3 to 7 years | 3 to 5 |
| Below average | 61% to 100% | 0 to 2 years | 6 or more |
This is why Brian keeps asking for higher limits. More available credit with the same balance means lower utilization.
Length of credit history: 15%
Brian covers this in the video · watch from 14:38
This factor looks at the age of your oldest account, your newest account and the average of all your accounts. A longer history shows more experience with credit.
Young people start out with a shorter history, and that is normal. It improves on its own with time. Brian opened his first card early and kept it open, which helps him today. He also points out that his oldest account is under 25 years old and his score is still excellent. FICO agrees: a long history helps, but it is not required for a good score.
Credit mix: 10%
Brian covers this in the video · watch from 16:11
Credit mix covers the types of accounts you have: credit cards, mortgages, auto loans, other installment loans and retail accounts. A mix shows you can manage different kinds of credit.
Brian's advice is not to worry about it. He has no auto loan and still has an excellent score. Don't apply for new types of credit just to improve your mix. The hard inquiries and new accounts can cost you more than the small gain.
New credit: 10%, and how to shop for a loan
Brian covers this in the video · watch from 17:16
Every application usually brings a hard inquiry. Many inquiries in a short time can look like you are struggling and borrowing from several places at once.
Brian's tip: when you shop around for the best rate on a loan, do all your applications within a short period. He says about two weeks. FICO's actual rule depends on the score version. Older versions treat inquiries within any 14-day span as one. Newer versions use 45 days. FICO also ignores those inquiries in the 30 days before your score is calculated.
This grouping applies to mortgage, auto and student loans, according to FICO. Do not assume it covers credit card applications. If you are shopping, the safest plan is to apply within 14 days.
When to open a new card
Brian covers this in the video · watch from 18:32
Brian's last tip is about timing. A new card brings a hard inquiry and a brand-new account, both of which can lower your score for a while. So open new cards when nobody will check your credit soon, for example right after you close on a home, sign a lease or take out a car loan.
Over the next year or two the effects turn in your favor. The inquiry stops counting, the account gets older, and the extra limit lowers your utilization. That is what Brian did with his two reward cards: he applied when he had no plans to borrow.
The reverse is just as important. In the months before a big application, such as a mortgage or a business loan, avoid new accounts and keep balances low.
Why your personal score matters for business funding
This video is about personal credit, but many small business lenders look at the owner's personal score, especially for newer businesses. Each lender sets its own minimum, and the minimum differs by product. Our guide on how your credit score affects business funding covers what lenders weigh.
If you plan to seek funding, run the no-credit-pull funding readiness check first. It shows where your file looks weak to a lender. It is an estimate, not a decision. ClearValue Lending is an education and comparison platform. It does not lend or make credit decisions; funding partners do, and they may check your credit when you apply with them.
Next steps
Educational information, not financial or legal advice. ClearValue Lending is an education and comparison platform. It is not a credit repair company or a lender, and it cannot change your credit report or score.
Questions viewers ask
How fast can I raise my credit score?
It depends on what is holding it down. Removing a reporting error can help as soon as the bureau updates your report; the bureau generally has 30 days to investigate a dispute. Paying down card balances can help once the lower balance is reported. Late payments take longer: they fade over time as you build a record of on-time payments.
How long does a late payment stay on my credit report?
Most negative information, including late payments and collections, can stay for seven years. Bankruptcies can stay for ten. Your score can start to recover well before that if you pay on time from now on.
Does checking my own credit report lower my score?
No. Checking your own report is a soft inquiry and does not affect your score. You can get free reports from Equifax, Experian and TransUnion every week at AnnualCreditReport.com.
How long do hard inquiries hurt my score?
Hard inquiries stay on your credit report for up to two years, but FICO says they only affect FICO Scores for one year.
Do several loan applications count as several inquiries?
Not always. FICO treats inquiries for mortgage, auto and student loans within a short window as one: 14 days in older FICO versions and 45 days in newer ones. FICO describes this for those loan types, not for credit card applications.
Should I close a credit card I don't use?
Usually not. Closing it removes its limit, which raises your utilization, and can shorten your credit history over time. The main exception is an unused card with an annual fee. Brian also suggests using an old card now and then so the issuer does not close it for inactivity.
What credit utilization should I aim for?
Lower is better. FICO does not publish a target, but says a low utilization can help more than using no credit at all. Brian's rule of thumb is 10% or less for excellent and 30% or less for good.
Should I pay a credit repair company?
You don't need to. The FTC says credit repair companies cannot remove accurate, current negative information, cannot legally charge you before they help you, and that anything they can do legally you can do yourself for little or no cost.
What is a good FICO score?
FICO Scores range from 300 to 850. FICO calls 670 or above good, 740 and above very good, and 800 or higher exceptional.
Does ClearValue Lending check my credit?
No. The funding readiness check and the funding-fit quiz do not pull your credit. ClearValue Lending is an education and comparison platform, not a lender. Funding partners make their own decisions and may check your credit if you apply with them.
Full transcript
From YouTube's auto-generated English captions, cleaned for punctuation and paragraphs. Brian's words are unchanged except for clear caption errors; text in [brackets] marks an editor's insertion or audio the captions did not catch.
Read the full transcript (3,757 words)
Editor's note: The percentage bands Brian reads out for on-time payments, utilization, length of history and hard inquiries ("excellent", "good", "average") are rules of thumb from a credit app, not bands FICO publishes. In the payment-history list, the captions lose the start of the sentence that gives the "good" range, so it is marked [in brackets]. The rate-shopping window he gives (about two weeks) is FICO's older 14-day window; newer FICO versions use 45 days.
My Credit Score watch from 0:00
In today's video, I will teach you how to fix your credit score fast. I had a very bad credit score, but now I've boosted it up to 846. So, first I'm going to show you my credit score, and then I'll teach you how to fix your credit score fast. So, let me show you this. I'll open up my app. I'm sure you have something similar. My credit score is 846 out of 850, and this is coming from Experian. You can look at my 1-year history. It's been good for the past year. So, here's how I have an 846. This is not to flex. Who brags about their credit score?
This is for educational purposes. You have to pay your bills on time. This makes up 35% of your credit score. I have zero late payments. This wasn't always the case, but I learned my lesson. Now, moving on to my debts. So, I am using 1% of my available credits. My total revolving debts is a whopping $900. Now, moving on to credit history. The average age of my accounts is 7 years. My oldest account, that's my credit card, is 19 years old. So, that's why it's important to get a credit card when you're young and keep it active. So, next is what's preventing me from having a perfect credit score.
It's the hard inquiries. So, I really wanted these two new credit cards because of the rewards. One was mileage, another was 5% cash back at a store. I couldn't resist, but now I have two hard inquiries. Now, moving on to types of credits. I have eight revolving accounts, which I barely use, $900 in debt. I have seven installment loans on some of my rental and commercial properties, and no car payments, fortunately. Living the dream, living the good life, right? So, my credit score is 846. Now, let me tell you how I did it, how I fixed my credit score.
Check Your Credit Report Regularly watch from 1:56
You need to check your credit report regularly. When my credit score was bad, it shot up by more than 100 points overnight. So, I'll tell you what happens. So, there was a fraudulent charge, and that balance got sent to collections, and it was on my credit report, and that destroyed my credit score. If you identify an error on your credit report, you can dispute it and get it fixed. So, the credit bureaus are legally obligated to attempt to fix the mistake. So, I did this, and it boosted my credit score. Contact the credit reporting agency. You can do it online. You don't even have to speak to a human.
Explain the discrepancy in writing. They will ask for some documentation. Give them what they need. And if it is an error, they will remove it. It's going to be an instant boost to your credit score, and it can be significant. It was for me. So, I did not check my credit report regularly, and that was a big mistake. So, I should have known better, but nobody told me these things, so now I'm telling you. So, this leads to a very interesting question. Do you need a credit monitoring service to alert you of suspicious activity? So, personally, this is just my opinion, I don't think so.
I do not subscribe to those services, and I'm just, you know, I'm doing fine without it. A lot of the banks, a lot of the credit card companies will give you automatic alerts for free. So, just make sure that they don't end up in your junk mail. And just so you know, there's so many of those businesses, you've probably seen those ads that claim to fix your credit for a lot of money, and it's usually a rip-off. They mostly look for errors on your credit reports, but you can do that by yourself for free, and it's very easy. It's so easy. So, the reason why those companies are in business is because so many people have errors on their credit reports.
The Federal Trade Commission says that 25% of Americans have errors on their credit reports. So, you can get free copy of your credit report through Experian, Equifax, and TransUnion. Again, I fixed an error, my credit score shot up significantly overnight. Another
Request a Higher Credit Limit watch from 4:03
way to boost your credit score is by requesting a higher credit limit. So, I do this all the time. I get bored on my credit card app, and I request more credit. That's just what I do. And then the auto message pops up saying that you can only request an increase every 12 months, please stop asking. But I just You know, I can't remember when I last requested it, so I just keep on requesting it, and it's bound to work one of these days. Anyways, the reason why I request a higher credit limit is because it helps my credit score. Here's why. So, for example, if you owe $900, and your credit limit is $1,000, then you are utilizing 90% of your available credit.
And that's a very bad look on your credit reports, 90% utilization. But if you request a higher credit limit, and it goes up from let's just say $1,000 to $10,000, then your credit utilization would fall from 90% to 9%. And then you would look much better. But listen, I want to tell you this. If you have an uncontrollable spending problem, then do not request a higher credit limit, please. Number three is that you have to pay your bills on time. So, I'm going to tell you the truth. When I was young, I don't know what I was thinking. So, sometimes I would owe money, and I just wouldn't pay it for whatever reason.
And I always thought, you know, what are they going to do to me? And you know what they did? They sent me to collections, and it showed up on my credit reports, and then I got labeled as a delinquent, and then it destroyed my credit score. So, don't be like the younger version of me, just plain irresponsible. So, please pay your bills on time. Sometimes, I don't know if you do this, but this is just me. When I owed money for a service or a product that I was unhappy with, you know, I was a dissatisfied customer, I would just not pay the bill to prove a point.
And that did not have a happy ending. So, don't try to be a hero. I know that you may be a person of principle just like me, but sometimes it's just not worth it. It's not worth your credit score suffering. If you have a late payment, it's going to remain on your record for 7 years. 7 years is a long time. You know, what happened to forgive and forget, right? Well, you know, they'll do that after 7 years. But, here's how it works. You're late on a bill, it gets reported on your credit reports, and your credit score falls significantly. It falls immediately. If you're late 60 days or longer, that's going to hurt your credit score more than being late 30 to 59 days.
So, please watch out for that. But, you need to know this. Even though the late payment stays on your credit report for 7 years, right? It doesn't mean that your credit score will be low for 7 years. Your credit score will quickly begin to recover little by little if you make your payments on time. So, I have witnessed this with my own eyes. So, even with late payments on your record, you can begin the repair process. Here's another quick fix for you. The credit reporting agencies make a big deal about credit card balances. So, it's important that you bring these balances down. And if you want to know how to reduce your credit card balances, I have dedicated a video to this. They are legit methods. There's no sales pitch. I'm just trying to help people out. So, please check out that video. I will leave a link down below. Number five is
Close Old Credit Cards watch from 7:33
do not close down your old credit cards. You may think that it's a good idea to close a credit card that you're not using, but no, that is a bad idea. That hurts your credit score. Even if you're not using a credit card, please keep it open. So, here's why. So, I showed you how they judge you. They look at the age of your accounts. They look at your credit utilization. If you close a credit card, then you are hurting both of those factors. So, I understand your two concerns. So, number one, you want to close down a credit card because you have a different credit card that gives you better rewards, right?
You've upgraded and you went to greener pastures. I get it. But, please just keep your old credit card open. And number two is that you want to close down your credit card because you're afraid of identity theft or fraud. But, just do what I do. Just don't carry that old credit card around. Put it away in your secret stash and just forget about it. So, I'm telling you to keep your old credit cards open, but there are exceptions. If you have a credit card that you don't use, but they charge you an annual fee, then yes, you should consider closing that credit card because that sounds like a big waste of money.
Also, some credit card companies will terminate your card due to inactivity. So, if you want to avoid that situation, put a monthly subscription charge on that credit card or just use that card every once in a while.
Become an Authorized User watch from 9:03
Another idea is becoming an authorized user. So, I'm going to be honest with you. I'm hesitant to bring this one up, but people always bring this one up as a way to boost your credit score. Personally, I never did this. And I'm just really going to fly past this one because who's really going to vouch for you like that? Because you're asking a friend or you're asking a family member for access to their line of credits. So, that is a big ask. It's like, "Hey buddy, I have bad credits, but can you give me access to your credit card?" So, it's a hard sell. I find it unrealistic, but if you can persuade someone into doing this, then that is
Stop hurting yourself with hard inquiries watch from 9:41
awesome. Number seven, you must stop hurting yourself with hard inquiries. So, sometimes there's no way around this, like when you need a mortgage. But, if you're trying to fix your credit score, don't unnecessarily seek out hard inquiries. So, hard inquiries damage your credit score, and they stay on your credit report for up to 2 years. Now, if you're serious about improving your credit score, and you want a better understanding of how they judge you and come up with your credit score, then this will be very helpful to you. Now, let me tell you what you need to do to improve and maintain your credit score.
So, I want you to understand the fundamentals. I want you to understand how this works. So, your credit score tells third parties how likely you are to pay what you owe. So, your credit score is based on your credit reports. Your credit report includes your activity and history based on information from financial institutions, credit card companies, and lenders. So, your financial activity is compiled into a reports, and a formula is used to create your credit score. And this formula is based on five factors. Your payment history makes up 35% of your credit score, amounts of debts or utilization 30%, length of credit history 15%, credit mix 10%, and new credit 10%.
Now, let me give you tips on how to boost your score on each one of these categories. Your payment history makes up 35% of your credit score. So, this is the most influential factor. To become and maintain super prime status, you need to build a history of on-time payments. Just think about it from the perspective of the lender. If you are asking to borrow money to buy a vehicle or to buy a home, then the lender wants to see that you have a strong track record of making timely payments. Your payment history includes activity from your credit cards, auto loans, mortgage loans, and delinquent accounts.
Your payment history is also going to be affected by activities in collections and bankruptcies. So listen, if you're late on a bill, that's going to stay on your credit report for 7 years, and that's going to significantly lower your credit score. But if you make your payments on time, then your credit score will begin to recover gradually. After 7 years, all late payments will completely fall off your reports. Here's a general guideline about your payment history. You are considered excellent if you make 100% of your payments on time. [A range is missing from the captions here] time is good. 90% to 97% is considered average. Less than 90% on time is below average.
Pay your bills on time watch from 12:34
Now, I'm going to give you advice in each one of these sections, but here it's very straightforward. You need to pay your bills on time. If you have a late payment, then yes, it's going to hurt your credit score. It's definitely not good, but it's not going to be the end of the world. So personally, I've made late payments in my life. It happens for whatever reason, but it just don't make it a habit and you will recover. So it's happened to me, but now my credit score is super prime. So please make it a priority to pay your bills on time. So I want to tell you this.
I showed you my credit info and you saw that I've been very good about making my payments on time. This is definitely the most important factor, so please be diligent about this one. The amount of debt that you owe is the second most influential factor. This makes up 30% of your credit score. This is also known as your credit utilization. Credit utilization is how much of your available credits that you are using. The lower your utilization, the better. If you are using a high percentage of your available credits, then this may indicate that you are overextended. And lenders will perceive you as a person that is at a higher risk of defaulting.
So, a higher utilization will hurt your credit score. So, that's how the lenders see it. A higher credit utilization lowers your credit score. A lower credit utilization increases your credit score. So, here's a general guideline of credit utilization. You are considered excellent if you're using 0% to 10% of your total available credits. Good is 11% to 30% utilization. Average is 31% to 60%. Below average, 61% to 100%. So, if you remember, this is why I said that I constantly request a higher credit limits on my credit cards because I want to boost my total available credit so that my utilization goes down, which is good for my credit score.
Length of credit history watch from 14:38
Moving on to the third most influential factor in your credit score is your length of credit history, which makes up 15% of your credit score. This refers to how long you've had credits and the average age of your accounts. A longer credit history is good for your credit score because this shows that you have more experience using credit. Here are the primary factors for determining the length of your credit history. Age of your oldest account. Age of your newest accounts. Average age of all of your accounts. And here's a general guideline of the length of your credit history. Your history is considered excellent if you've established 25 years of history or more. 8 to 24 years is considered good, 3 to 7 years is average, 0 to 2 years is below average.
So, of course, if you're younger, you're going to be automatically dinged in this section for not having a longer history. But, as time goes on, this section of your credit score will improve as you build your history. That's why it's so important to start building your credit history as soon as possible. So, you saw my stats. I started building my credit at an early age and as quickly as possible, and I kept that credit card open this whole time, which is boosting my credit score. Another thing that I want to point out is that even though my oldest accounts is below 25 years old, I still have an excellent credit score. So, 25 plus years, that's not necessary to have a great credit score.
Credit mix watch from 16:11
The next factor that will impact your credit score is your credit mix. Your credit score will take into consideration what types of credit accounts that you have, which include credit cards, mortgage loans, auto loans, installment loans, retail accounts, etc. Having a mix boosts your credit score. That's because it demonstrates your ability to successfully manage different types of credit. But, honestly, don't worry about this. In order to be super prime, it is not necessary for you to have each one of these loan types. Therefore, do not go applying for different types of credits just to boost your credit score. Because remember that this only makes up 10% of your credit score, and the cost-benefit is just not worth it.
Okay, so here, for me, I do not have an auto loan. So, I don't have all these categories, but still, my credit score is just fine. So, again, you don't need to check off all the boxes in order to have an excellent credit score. The last factor that
New credits watch from 17:16
impacts your credit score is new credits. So, this is very important for you to understand because you will run into the situation multiple times in your life. When you apply for a loan, they will perform a hard inquiry, and this will hurt your credit score. An inquiry is when your credit report or your credit score is requested, and the credit bureaus keep track of these inquiries. If you have a lot of inquiries, then it's a bad look because it looks like you are struggling financially because you're frequently looking to borrow money from multiple sources. And it's very important that you understand this, especially if you're looking for a loan.
If you have multiple hard inquiries in a short period of time, those multiple hard inquiries will count as a single inquiry. The time frame allowance is about 2 weeks. So, here's my tip. If you're going to shop around for the best interest rates with hard inquiries, do it strategically in a short period of time. That way, all of those hard inquiries will count as a single inquiry. If you spread out the inquiries over a longer period of time, then you will have multiple hard inquiries on your credit report, and it's going to lower your credit score. So, here's a general
Hard inquiries watch from 18:32
guideline of hard inquiries. If you have zero hard inquiries in the past 2 years, that is considered excellent. One to two is considered good. Three to five is average. Six or more is below average. And I want to give you this tip. When there's a moment in your life when you don't need a perfect credit score, that's going to be the best time to get an additional credit card. So, I want to explain this. So, let's say that you recently bought a home or moved into a new apartment or you just got an auto loan. When you do these activities, you will need to show your credit score, and having a high credit score, that's going to be very important to you at that time.
But let's say that you do those things and then in the near future, nobody's going to be checking your credit score for at least a year or two because you just got an auto loan, you moved into your new place and that is going to be the perfect time to get an additional credit card. That's because when you apply for a new credit card, they're going to run a hard inquiry on you and that's going to lower your credit score, right? And if you get a new credit card, then the age of your newest account is going to be recent and then it's going to hurt your credit score as well.
But honestly, in that situation, who cares? Because nobody's going to be looking at your credit score anytime soon. And then in the future, those factors will swing in your favor and it's going to boost your credit score. Because the hard inquiry, it's going to fall off your record. Your newest account, it's not going to be so new anymore. It's just going to get older. Your available credit will go up. Your utilization will go down. And those are all good for your credit score. So if you're going to apply for a credit card and your credit score is going to take damage in the short term, then the best time to do that is when nobody's going to be looking at your credit score.
So when you saw my info, I showed you that I had two hard inquiries, right? Because I told you, I mean, I was just being honest, that I really wanted those two credit cards for the rewards and right now I do not plan on applying for new credits. So right now is a great time for my credit score to take a hit. It I mean, it didn't seem like it took much of a hit, which I'm surprised by, but you know, that works for me. So listen, you can fix your credit score fast. If I can do it, then you can do it, too. My credit score was terrible.
I don't know what I was thinking when I was younger, but I learned and I wanted to share this with you. Please subscribe. I thank you for the support and I wish you a very nice day. Take care.
Where the ClearValue Lending team would start
Brian's video covers the strategy. Here's where our published methodology points business owners next — chosen for fit, not commissions.
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