what's going on you guys so I'm excited
to bring you a new collaboration on my
channel this time with Jason from the
honest finance channel on YouTube he has
lot of topics related to investing and
personal finance and he has a number of
different videos talking about credit
cards and your credit score I've invited
him to come onto this channel to talk
about how to increase your credit score
in the next 30 days and he's going to be
teaching you how to do this by learning
about credit card utilization so if you
guys enjoyed this video make sure you
jump over to his channel and subscribe
and thank him for making this video but
let's go ahead and learn more about
credit card utilization from Jason with
the honest finance channel on YouTube I
want to start by giving Ryan a huge
thank you for putting this video up on
your channel if all of you guys watching
this haven't yet subscribed to Ryan's
channel subscribe because he seriously
makes really good content and now moving
on I'm Jason with the honest finance
Channel today I want to talk about how
to improve your credit score fast by
using credit card utilization now we all
know that your credit score affects
almost everything you buy when it has to
do with getting a loan but did you know
that by keeping your credit card
utilization score low you can actually
improve your credit score and only about
30 days so what the heck is your credit
utilization score your credit
utilization score is basically all of
your credit cards limits put together
and how much you're spending out of
those limits and it actually controls 30
percent of your credit score which is
255 points and you need to keep the
utilization score as low as possible to
benefit the most from your credit score
now let me give you an example so that
this makes sense let's say that you have
two credit cards one of them has a
$5,000 limit and the other one has a
2500 dollar limit now based on these two
credit cards that you have you've got
$7,500 of total spending power under
your name now let's pretend that you
spend 2500 bucks between the two cards
during the month to figure out your
utilization score just take the 2500
bucks that you spent and divide it by
the $7,500 in total spending credit that
you have looks like this utilization
score is 33% and that's not very good in
order to get the maximum benefit from
your credit score your utilization score
needs to be about
one two nine percent and if you can try
not to ever exceed 15 percent the reason
you really don't want to go above 15
percent is because at that point it's
actually going to hurt your credit score
just pay down your credit card and pay
attention to your spending and you
really can increase your score in about
30 days now here's a cool little hack
for this most credit card companies are
going to report this information to the
credit bureaus on the last day of the
billing cycle or technically the closing
date so if you really want to get your
utilization score extra low then just
pay down your credit card before the
statement closing data I actually did
this with my credit cards and I honestly
gained about 60 points on my credit
score in just about two months and if
you're going to be making a big purchase
in the future just plan ahead so that
you can plan on getting your utilization
score low so that your credit score
bumps up by the time you need your loan
so if you're planning on buying a car in
a couple months just plan ahead pay down
your credit cards and pay extra
attention to your utilization score and
then in a couple months when you go to
buy the car your credit score will be
higher and if you're worried that you
don't have enough spending power on your
credit limits then just call up your
credit card company and ask them for a
credit increase usually just by asking
they'll increase your credit limit right
over the phone and some credit cards
will even increase your limits
automatically and that's a really cool
feature on those credit cards because
you don't have to do anything they'll
just increase on their own and I'm not
saying this because I want you to
increase your limits so that you can go
out and spend more I'm just saying if
you have more spending power then your
utilization score is easier to manage
keeping it in the lower end and
obviously if you want to have more
spending power then you can just go get
more credit cards but that's not a smart
way to go about things because that will
affect your credit score negatively in
the short term now remember there's a
lot of different things that affect your
credit score and one of them happens to
be opening and closing credit cards just
get new credit cards when you need new
credit cards not just because you're
trying to hack the system now if you're
the type of person that pays off your
outstanding balance in full every single
month and there's a high probability
that your utilization score is actually
zero sometimes and that's totally fine
for your credit score the real problem
with a zero utilization score
if you're not using your credit cards if
there's no activity reported then it's
neither helping or hurting you and that
kind of 0% utilization is bad because
your credit card is considered inactive
and after a long enough period of never
using your credit card your credit card
company might eventually just cancel it
for you and this will unexpectedly cause
your spending limits to decrease which
will probably increase your utilization
score so just keep your credit cards
active by using them once in a while a
zero percent utilization score is
perfect for your credit score as long as
the cards are considered active
obviously as I mentioned before there's
a lot of things that affect your credit
score but this utilization hack really
does work just remember to keep that
score as low as possible and pay down
your credit card before the closing date
so that it's not being reported to the
bureau's if you do this you really will
see an increase in your credit score in
just about 30 days once again I'm Jason
with the honest finance Channel if you
did find this information helpful feel
free to subscribe to my channel or at
least give the video like that's all
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