Here's Graham Stephan's Advice for Getting a Perfect Credit Score

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KEY POINTS

  • Graham Stephan is a real estate agent with a YouTube channel offering financial advice.
  • His recent tips on earning a good credit score include making on-time payments, checking for mistakes, and more.


Could following Graham Stephan's advice help you with your credit?

Graham Stephan has become famous for his YouTube channel focused on millennial finances. In a recent Twitter thread, he provided some useful tips on building a perfect credit score.

These tips from Graham Stephan can go a long way toward building credit

Stephan began his Twitter thread on earning a great credit score by explaining the factors that go into determining your score. These include:

  • Payment history (the most important)
  • Credit utilization (credit used versus total credit available to you)
  • The average age of your credit
  • The kinds of credit you have
  • Inquiries on your credit report

He then offers tips for how to excel in many of these key factors. 

  • To address payment history, he suggests setting up autopayments for the minimum amount due so you never miss a payment. He also urges negotiating with creditors to get late payments removed from your report.
  • To show you pay bills on time, he urges using a service such as Experian Boost that reports your payment history for bills not normally shown on your credit record, such as utility bills. 
  • If you have bankruptcies or foreclosures, he warns they can sometimes remain on your credit history longer than allowed, and says this should be fixed as soon as possible.
  • To address credit utilization, he suggests getting a card with a large limit and opening as many cards as you can. And he advises keeping your credit utilization ratio below 10% if possible.
  • For improving the average age of credit, he advises never closing down an old credit card even if you don't use it much, and becoming an authorized user on someone else's card (someone with a solid credit history). 

Finally, he warns, "You can't fix what you can't measure," and suggests getting a free assessment on websites such as AnnualCreditReport.com

Should you listen to Graham Stephan?

Stephan is right about the credit factors that determine your score, and his tips for improving your credit are helpful. Make sure, though, that you do not apply for too many credit cards or loans at one time to lower your credit utilization ratio -- opening too many cards at once could shorten your average credit age, and leave you with too many inquiries in your report. 

Be smart about setting up autopayments, too. If there is a chance you could overdraft your checking account by doing this, you could cost yourself money -- so be sure to work payments into your budget. And while Stephans suggests setting up autopay for the minimum amount due, it's ideal to pay the full balance to avoid interest charges. 

Finally, Stephan also makes the helpful point that you don't need a perfect score to qualify for the best loans. "Once you cross 760, lenders don't bother if it's a 780 or 800," he explains. This is a good tip, too -- don't stress out about getting a perfect score. Instead, focus on responsible borrowing behavior that will open doors for you in the future. 

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