So.

You know what your credit score isbut what does that mean? Is it good? Is it bad? What is that magic number thatyou're going to need to secure that car loan and what happens if your magicnumber isn't so magic how do you change or improve your score in this video I'mgoing to teach you exactly what a good and a bad credit score is in both Canadaand the US and how you can change and improve your score hello everyone welcome to the ReadySetlife youtube channel my name is brittany and i'm a financial coach who makesvideos all about helping you take the fear out of finance so that you can livethe rest of your life I put out new videos every single Thursday so if youthink that you might be interested in seeing more like thisjust hit that subscribe button and the notification bell so you won't waste anyof my new uploads alright so last week I taught you what a credit score was andhow to check it but how do you know if it's actually good that is what we'regoing to be talking about today if you missed last week's video I'm gonna linkit up above because I suggest that you also watch that one as well that's goingto be really helpful in figuring out how the information from this video canrelate to your personal situation so what is considered good creditobviously it will depend on the company that you're asking to loan the moneyfrom where the line is between good and bad credit however in general the higherthat your number the better your credit is if we take a look at Equifax andremember from the last video I said that that was one of the top official creditbureaus they say anything from 660 to 724 is considered good credit anythingfrom 725 to 759 is considered very good credit and anything from 760 and aboveis considered excellent credit this means that anything below 660 isconsidered bad credit now if you've already checked your credit and you findyourself in that zone don't freak out yet there are definitely ways that youcan improve that number and it really does depend on kind of where you arewithin that lower than 660 range so for example from 562 660 you might actuallybe still okay for getting a loan you just might not have great loan terms orhave a lot of wiggle room on what they're willing to give you however ifyou're on that lower end that 300 to 560 range that's where we're going to runinto some problems so if you do find yourself here how do you turn it aroundlet's look at how these scores are calculated no one knows with 100% certainty on howcredit scores are calculated the bureau's don't release their exactformulas and if they did it would be way too easy to cheat the system however wedo know the factors in which they're looking at and have kind of a rough ideaof how much each of them matter credit history is a big onelenders the people that you're borrowing the money from want to know that youhave a long history of properly repaying debt so they can know that it's morelikely that you're going to repay theirs the longer your accounts have beenopened the better if you don't have a credit history it can be prettydifficult to get approved for credit it's kind of like the chicken and eggscenario or applying for one of those entry-level jobs that require threeyears of experience you have to have credit to get credit it can be prettyfrustrating hopefully you've got some sort of credit card in college oruniversity that you can start with but if you don't have any credit historystart one you're going to have to be able to show that you can pay somethingoff responsibly and the quicker that you start the better off that you will bealong with credit history payment history is also a pretty importantfactor of your score again the lender wants to know that you areresponsible with what you're given and you stick to the agreement terms I Evepaying your loans in the amount that satisfactory and on-time if you pull thereport and you find that you've messed up a couple of times on payments it'sokay you can't fix the past but you can be better moving forward so take a fewmonths and be consistent with your payments the further that you can getyourself away from that old irresponsible you the better that you'llbe able to prove that you're reformed and your credit will improve so don'tmiss a payment again and you should be okay another thing that's reallyimportant to your score is credit usage credit usage is basically how much ofthat debt that you have or the ratio of the available amount and how much you'reactually using it's important to have a credit history but if you have too manyaccounts open with too high balances then it can really affect you negativelyso a good rule of thumb is to make sure that you're keeping your credit usage ator below 30% of your available credit if you have a credit card limit of say$2,500 make sure that there's no more than a seven hundred and fivedollar balance on it at a time now obviously the lower the balance thebetter it is if you can pay off your credit right away in full that's thebest-case scenario but if you're having trouble really try and keep it as closeto that 30% as possible another trick that people use for this is to say yesto those credit increases that the banks will try and sell you on now obviouslyyou have to be very careful with this if you are not a good credit user and youknow if you're not and this trick isn't for you but if you are prettyresponsible with the way that you use your credit cards say yes to thoseoffers don't be afraid to have more credit because there's no harm in havinga higher limit on your card you do not need to use it but it does make thatpercentage threshold higher and will add to your credit score there are two typesof credit checks a hard credit check and a soft credit check if you're checkingyour score just for your own interest or maybe you're getting like a backgroundcheck from an employer or like a landlord or something it's most likely asoft credit check and this type of check does not affect your credit score a hardcredit check happens when you're actually asking to borrow money and thisdoes appear on your report and will actually put your credit score down afew points for a little while lenders will take a look at the number of hardcredit checks on your account because that can be an indication of whetheryou're applying for just for what you need or maybe you're in a bad financialspot and you're applying for too much credit too fast the type of credit thatyou have also affects your score so if you have a mix of different types ofdebts a credit card and a house and a line of credit then it can really showcompanies that you're able to balance and manage different types of paymentsat once which is a good thing it's not looked down upon if you don't havedifferent types of debt but it does add to your score if you have kind of a morediverse portfolio if you want to improve your score trylooking at all of the factors that I just mentioned figure out where yourweakest points are and try and work on improving those first that being saidall of these factors contribute differently to how your score iscalculated so make sure that you're also taking a look at which parts that thecredit bureaus keep in priority let me explain what I meancredit bureaus that are calculating your score use two main formulas the Vantagescore and the FICO score the formula that the credit bureau chooses to usewill really determine how much of those factors I mentioned matters here is abreakdown of the importance of each factor in each formula and feel free topause and take a screenshot and do whatever you kind of need to do to spendthe time reading the graphic because I know it's a lot of information on it most of the credit-card bureaus use FICOformulas so I would concentrate on that one first however an important part ofyour credit score no matter which formula is being used is your paymenthistory this definitely proves that you can be responsible with your money so ifyou have a bad credit score work on building this first always pay somethingon your credit cards if you can't make minimum payments call your credit cardcompany or loan company often they're willing to work with you on some type ofmodified plan they just want to see that you're trying and make sure that youcall them if you ever do miss a payment if you've always been really great withyour payment's and you mess up one time see if you can get it reversed you don'twant that record on your credit and if you're a loyal customer the companiesare often willing to do this at least once or twice which can make a hugedifference for you alright hopefully that wasn't too overwhelming for you I'ma pretty detailed person and I want to know all the information so I try andput that forward but I know that it can be a lot so please feel free to pausetake a break come back to the parts of the video whenever you need to if youlike this video give it a like and if you want to see more of my videos makesure that you click that subscribe button and ring the notification bellsso you don't miss any of my new videos alright thanks for watching and untilnext time I'm wishing you great financial health bye one of thetop official credit card euros is it credit card another trick that peopleuse for this is to say yes and put a friggin turtle you.