One of the top 2 reasons we hear why people can't buy their first home is because they can't save money for the downpayment and they have bad or no credit.
Here are some super simple tips and some info on how to take control of your spending and saving and the different ways to increase your credit score and what things you might be doing that are causing a bad score.
Understand your Money!
Here are a few key points discussed in the video to help take control of your money:
- Know the difference between good debts and bad debts
- Start tracking -know where you're putting your money!
- Create a weekly/monhtly budget - try using Mint
- Figure out your fixed and variable expenses and what you can improve
- The 'Latte Factor' small spending habits that add up
- Increase your credit payments to pay off debts faster
Increasing your Credit Score!
The first step is knowing where you stand with your credit score. There are lots of ways to check your score, what I use is an app called Credit Karma. It's easy to use and shows all of the lines of credit, payment history, and balance for each line of credit. It's a great way to keep tabs on what credit is listed under your name as well as checking in on what your score is. A perfect score would be 900, but the basis for a good credit score is around 650, and the higher it is, the better.
Here's a breakdown of how your score is calculated so you can make sure that you're doing your best to increase your score:
- 35% of score- Payment History
- 30% of score- Utilization (credit used vs credit available)
- 15% of score- Length of credit
- 10% of score- New Credit
- 10% of score- Types of credit
The 2 X 2 X 2 Rule
Lenders want to see that you have 2 lines of credit open for at least 2 years, worth at least $2000. This will help you build your credit.
We hope you found value in today's video! Feel free to hop in the comments section and let us know what you found most helpful!