How To Get A PERFECT Credit Score For $0

What's up, guys? It's Graham here. So for the last 12 years, I have studied, researched, and analyzed every single aspect of building your credit score to the point where eventually I could brag on YouTube about achieving an 800, which is the threshold that many people consider to be a perfect score.

And today I'll teach you how to get this exact same achievement for totally free and probably way less time than it took me. Having a perfect credit score means that you can get the lowest interest rates anytime you want to leverage your money in real estate, business, or in life. It's how I was able to get such low interest rates that effectively it's like they're giving me free money.

Not to mention, I'm so confident with what I have to say in this video that I guarantee this information could be worth easily a few thousand dollars at minimum if you just follow along. So with that said, here's exactly what you need to do right after you smash the like button for the YouTube algorithm. That's it! Otherwise, there's no pitch here—just pass it on to somebody else if you found it helpful; that helps me out a lot.

And now, with that said, let's begin. At first, in order to understand how to get a perfect credit score, you have to understand how the credit scoring system works in the first place. Like I said, you’ve got a class that grades you differently on attendance, homework, test scores, and whether or not you hit the like button. Your credit score grades you on several different factors as well, and if you want to get a perfect score, you have to do well on all of them.

The first and largest factor is based on your on-time payment history, and that makes up 35% of your score. This means that you always pay your bills off on time, as agreed, without ever being late or missing a payment. Because if you do, that stays on your report for seven years and it has a pretty devastating impact. The good news is that when it comes to paying off your credit cards, you only have to make the minimum payment in order to stay current, and most of the time that's only between twenty-five and fifty dollars.

So even in the worst-case scenario, if you're not able to pay off the full balance, at least make the minimum payment so that way your account stays in good standing. The second largest impact is what's called the amounts owed, and that makes up 30% of your score. This is also what's known as the utilization rate, which calculates how much credit you have available to you versus how much of it you actually use.

Now, if you're somebody who maxes out your credit cards or you use almost all of the credit that's available to you, your score is going to go down because you're seen as a riskier borrower. When it comes to this, it's really important to clarify that it's not the dollar amount that the credit algorithms care about, but instead, the percentage of the credit that you use.

As an example, if you have a thousand-dollar credit line and you spend all one thousand dollars, that counts as a utilization rate of a hundred percent, and that's very bad. However, if you spend that very same thousand dollars with a ten thousand dollar credit line, then that's only a 10% utilization rate, which is good. One of the techniques that I use to help with this is to simply have a lot of available credit with really high limits. That way, even if I spend ten to twenty thousand dollars on a renovation, it's still only a small percentage of the overall credit that I have available.

The third factor we have is the average age of your credit history, and that makes up fifteen percent of your score overall. Lenders like to see that the longer you've had your accounts open for and in good standing, the more likely you are to be a good borrower. Of course, you should notice that I said this is based on your average account history and not your total history, because this makes a huge difference.

For example, if you've only ever opened up one credit card four years ago, then your average credit history is going to be four years. But if you opened up that same account four years ago and then you got a brand new credit card today, your average account age will drop to two years, which then would impact your score. So my recommendation is to start building your credit as soon as possible, but also keeping those accounts open for as long as possible. This is going to help you build up a solid fortress of credit foundation history so that when you do open up a new credit line, it's not going to have as big of an impact.

Then, fourth, we have the types of credit that you have available, and that makes up another 10% of your score. This means that lenders want you to have the experience of handling multiple types of loans, from several credit cards, auto loans, a mortgage, and anything else that'll add on to your credit report. I know this all sounds like kind of backward thinking, but it does go along with the mindset of we're only going to lend money to people who don't need it because they're going to be the people most likely to pay us back.

And that is very true. Finally, we have the remaining 10% of your score, which is calculated by the number of hard inquiries you have on your report. See, anytime you go and apply for a new line of credit, that's marked down in your report. Now, generally, the more marks like this that you have on your report, the lower your score is going to be because lenders see you out there actively trying to get as much credit as possible, and you're seen as a higher risk. Personally, I wouldn't worry about this too much because it'll only impact your score temporarily, and it's pretty minor.

So now that you know how some of this works, here are some strategies that you could use to instantaneously boost up your score to the legendary 800 mark, all of course for free. First, you'll need to go and view your credit score by signing up for free at either Credit Karma or creditsesame.com, which both give you all the details of your credit history along with their own credit scoring model. Or you can get your actual credit report for free once a year at annualcreditreport.com.

And by the way, one small tip: If any website ever asks you to pay to see your credit score, just click out of it because there's no sense paying for something that's already free. The more you know! Anyway, now that you have your reports, you could begin reviewing it to see which items can be improved, and usually it's going to be one of these.

First, you don't have enough credit. If you're relatively new to all of this and you barely had any time to open up a credit card and make on-time payments, then most likely your score is not high because you haven't had enough time to build up your credit history. If that's the case, I'll go over what you could do to fix this very shortly.

Secondly, maybe you got a late payment or two, or three, or geez, even more. Like I mentioned, this is something that'll stay in your report for a whopping seven years, and that's a lot of bad luck in credit score time. But thankfully, there are some solutions to this that I'll cover momentarily. Third, you should check to see if you have any accounts in collections. If you see this, well, I'm not gonna lie; it's pretty bad.

For those not aware, this is what happens when you are so late on a payment, usually more than 180 days, that the lender just gives up on you and calls the whole thing a loss. Then they sell off the debt to a third-party collections agency, who calls you up non-stop trying to get you to fork over the money. Typically, collections under a hundred dollars do not show up on the latest FICO scoring method, but this is still something you're going to want to keep on top of regardless of how much money it is.

Now, fourth, you should check to see if you have any high balances or maxed-out credit lines. This is what happens when you borrow or charge the maximum amount that you're allowed to. When that happens, lenders see you as a bigger risk because why else would you have to borrow so much money? That, in turn, brings down your score.

In addition to that, the popularity of the buy now, pay later platforms are showing up on your report as well. So if you thought it was an easy workaround to buy that $3,500 Peloton bike for twenty dollars a month, you might want to reconsider. Fifth, check to see if there are any foreclosures or bankruptcies in your credit report. This should be a pretty obvious one, but surprisingly, sometimes marks like this are left on longer than they should, or people might have misinformation or had their identity stolen without even knowing about it.

But once you see exactly what's impacting your score, you'll be able to figure out the best way to improve it, and usually, it's going to be one of these: One, if you don't have enough credit and you want to increase your score immediately, the biggest life hack here is to become what's called an authorized user. This is when someone else with an extensive credit history adds you as an authorized user to their credit card, and then all of a sudden their credit history shows up with your account.

This is also what's known as credit piggybacking because you can get the benefits of someone else's score without doing all the work yourself. However, there are some catches that you have to be made aware of because you know what they say, if it sounds too good to be true, it probably is. Unless, of course, you're getting your free stock down below in the description when you sign up for public using the code Graham, because that could be worth all the way up to a thousand dollars and it's definitely not too good to be true! So you better get it before the offer expires.

Anyway, the first catch is that some credit reporting agencies are catching on to this, and because of that, the credit history is not going to transfer over to all three credit bureaus. As of right now, it appears as though Capital One, Discover, Wells Fargo, and Bank of America will report past credit history, and other credit cards will only begin showing history at the time that you become an authorized user, which at that point is essentially like you just getting another credit card—except in someone else's name.

Now, the second catch here is that because all the history is going to be transferred over to you, that also includes late payments, delinquencies, and any negatives. You really need to make sure the person who's adding you as an authorized user has at least three to five years of credit experience, no late payments, and everything in good standing; otherwise, it just kind of defeats the entire purpose.

Now keep in mind, this is not a substitute for building up your own credit, but it can help out tremendously early on if you have someone who's willing to do this for you. Two, pay down your balances so that your utilization is under 10%. I would say for most people, this is going to have the biggest impact on your score in the shortest amount of time possible. Just remember, the amount you owe, known as your utilization rate, makes up thirty percent of your score.

So if you keep a high balance on a credit card, that's going to bring down your final number. In this case though, you've got two options: Number one is to pay down your balance. Once this happens, a higher score is usually reflected in 14 to 30 days. The second, I know it sounds totally counter-intuitive, but if you have an account balance you can't pay down, sometimes it actually helps to open up another credit card or increase your credit limit.

That's because, as I mentioned earlier, your utilization is based on your total credit line. Meaning, if you have five thousand dollars of available credit and you spend all of it, that's a hundred percent utilization, and that's bad. But if you open up a new credit line and now you have ten thousand dollars of available credit, while you spend the same five thousand dollars, that's a fifty percent utilization rate, which is not as good, but it's not horrible.

This is why I often recommend that people open up as many no-annual-fee credit cards as possible to increase their total credit line, or you could ask your credit card companies to increase your limit, which will decrease your overall utilization, helping out your score. Now, obviously, if you have a spending problem and these higher limits got you into trouble in the first place, then do not do this under any circumstance.

But if it's from a tactical standpoint and you have the self-control not to just spend up the additional debt, increasing your credit lines or getting more credit cards may actually help improve your score in the long run. Now, the third thing that you could do to increase your score is kind of new, and it's called Experian Boost. Now, here's the thing: When calculating your credit score, a large portion of that is analyzed by the number of on-time payments, your total credit history, and the types of loans that you've been given.

But obviously, that requires you to open up multiple credit cards and pay them all off on time. So in a new credit scoring model, Experian Boost would aim to fix that and most of you would be able to qualify. Now, none of this is sponsored, but Experian Boost is a completely free opt-in service that links your accounts and then tracks on-time phone and utility payments by adding them as a positive trade line on your Experian credit file.

Doing this will give you more positive credit history and will add on-time payments back to your report. So for pretty much everyone looking to build up their credit and to increase their score, I would highly recommend this, unless of course you don't pay off your bills on time, in which case don’t do this. But for everyone else, do it.

Next, the fourth thing that you could do is to remove both late payments and delinquencies from your account. Remember, anytime you miss a payment or it gets sent off to collections, it's absolutely going to destroy your credit score. But not all hope is lost. If you have any kind of late payment, just be aware that it only gets worse the more time goes on.

For example, a 90-day late payment is going to be significantly worse than a 60-day payment versus a 30-day payment, and so on. So if you find yourself in this position: Number one, go and cut up all of your credit cards. In YouTube, Dave Ramsey. Two, pay off any late payments as soon as possible. Like I said, it only gets worse the longer you wait, so it's a lot better to have a 30-day late payment than a 60-day late payment. So do not put this off.

Third, it's always worth it to try to negotiate the terms of your debt to bring the account back to current. This means you could reach out to the lender and if you're having a difficult time making payments, see if you could work out a payment plan. The reality is, late payments like this are notorious for being charged off at pennies on the dollar, so most lenders want to work with you to get something back than nothing.

The fourth point: If you paid off the debt but the late payment is still showing up on your report, you could always try calling them up to see if they'll remove it as a courtesy. Now to be clear, they're not obligated to do this at all, but you know the saying: You could catch more flies with honey than with vinegar, and asking really really nicely can sometimes go a long way.

If five, if all else fails, look for any inaccuracies on your report and then you can dispute it. Now again, you should never lie here, but if you see anything out of place and they can't prove otherwise, they'll be forced to remove it from your report. So sometimes it's worth trying. Doing all of this should absolutely make a huge difference in your credit score in a relatively short amount of time.

So all of this could help you get to a perfect score. The fifth and biggest mistake that I see all the time is that you should never close out your old accounts. The thing is, because your credit score is calculated by the average age of your account history, that often starts from the age of your very first account. But if you close that oldest account because you don't use it anymore, what you're really doing is erasing your oldest trade line.

And when that happens, eventually the average age of your account history is going to drop. The rule of thumb here is that if they have no annual fee, just charge an occasional one-dollar Amazon gift card to the card every six months or so, and then just keep it active for as long as possible. Now, if the card does have an annual fee, consider downgrading the card to a free option so that way you keep your account history without having to pay for it.

By doing this and making sure you keep your accounts open and in good standing for as long as possible, that will help increase your score. The sixth, this one is probably the most important point to listen to: Do not pay for any credit repair services and ignore all the spam comments praising someone for increasing their credit score. Most of those are scams, and every single time I try to delete them, a million more pop up.

All of this is something that you could do yourself for free in under an hour, and everything is extremely simple to learn. If you're able to utilize these six steps, a perfect credit score is absolutely achievable for totally free without paying any interest to credit card companies, just by paying off your bill in full with no annual fee credit cards.

It's also worth mentioning that even though getting a perfect 800 credit score certainly comes with bragging rights, from a lender's perspective, anything above a 760 will usually get you the best rates, terms, and the full red carpet service. So there's really not a lot of difference from a 780 to an 800 from their perspective. But following this certainly opens up so many new opportunities to save a lot more money that wouldn't be possible otherwise.

And if you found this helpful, all I ask in return is to subscribe if you're not already subscribed or share this video with someone else who needs to improve their credit score. Just tell them Graham sent you. To do that, or I don't know, to share the video? It helps out the YouTube algorithm and ties the channel tremendously.

So thank you guys so much for watching! Also, make sure to add me on Instagram and on my second channel, The Graham Staffing Show. I post there every single day and not posting here. So if you want to see a brand new video from me every single day, make sure to add yourself to that. Thank you guys so much for watching, and until next time!