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How’s it going everybody this is beat the bush today i’m gonna talk about how to build credit when you don’t have any credit at all you see it becomes a chicken-and-egg problem when you don’t have any credit because no one will extend you any credit when you have bad credit you can’t get approved for a brand new loan or and then secured credit card so that you can
Build some credit history now this method i’m gonna describe in this video is very good for people with a credit score of under 700 actually the lower the better that this method will work now this video is sponsored by self lender and it got me thinking if i would actually make this video if they do not give me a referral fee my thinking is this although their
Service cost money and it’s good for the customer and it does work so if i’m not getting a referral fee from them i’m essentially doing free advertisement for them and i’ll feel sort of cheated because they cost me time and money in order to make these videos so you have to realize without this referral fee i probably will omit this particular service and recommend
The remainder of the stuff that i recommend in this video now before i show you what you need to do to improve your credit score i want to show you why you want to improve your credit score first now higher credit score translates to a lower interest rate for example for car loans or mortgages if you do not plan to use your credit score to get loans and stuff then
Well you don’t really need to increase your credit score however most people do need to finance things so therefore you need a higher credit score to get your interest rate as low as possible let me show you a dramatic example with the home mortgage for example for a $250,000 home mortgage one person has pretty low credit and gets a 5 percent apr over the life of
That loan that person’s gonna pay four hundred eighty three thousand dollars back over 30 years however for a person with excellent credit maybe they can qualify for 4.5% apr now this is a very small difference because it’s only 0.5% however by the time you pay back the full loan in 30 years this person getting 4.5% is gonna pay back four hundred fifty six thousand
Dollars now if you take the difference between these two it’s twenty seven thousand dollars twenty seven thousand dollars just over half a percent difference in interest rate now in order to prove i know what i’m talking about here is my credit score i’ve obtained a credit score as high as 848 before but i do not keep it around there because i’ve been turning credit
Cards taking advantage of my credit score in order to get more benefits back because of this is hovers around 827 or so now there are three main ways to build your credit if you do not have any credit to begin with all these things i show here is basically pretty separate you can do all of them if you want your credit score to increase that much faster the first
One is getting a secured credit card which means you have to pay money into it for whatever credit line you get most of time it’s around five hundred dollars you have to put five hundred dollars cash in with the bank and then you can have a credit line of five hundred dollars if your credit card is really really bad then you end up having to pay an annual fee
Which means it costs you money the second way to do it is walk into a credit union if you’re part of a credit union you can just use that one instead you go and ask them if they have a credit builder loan that kind of loan is basically a real loan you get the money maybe it’s a small amount and then you’re paying monthly payments back into it this is to generate
A history in your credit report the disadvantage of this is also you have to pay a little bit for in terms of interest rate you also have to walk into the credit union you may also need to physically go to a credit union or belong to one in order to get something like that the third thing is basically for anyone that once applied to this you can it’s called a self
Lending loan this self lending loan is basically an online platform you don’t have to leave the house in order to do it you just go online apply for it and then you can get it at first i was as skeptical as anyone i was very very careful i wanted to look at what kind of bank they use i looked at the fine print i read everything now this video is sponsored by self
Lender if you decide to go and use my fill that link i will benefit from it now the first time i recommended self lender was about two years ago since then a lot of people have come back in the comment section and reported to me what success they’ve had now i’m gonna omit their names for privacy reasons but i’m gonna show you the comments themselves one of them
Says make your way down to texas i’ll treat you to some awesome barbecue it’s on me your self lender advice has already increased my score over 60 points now the point increase you can expect varies it depends on how low a score you started with the lower it is the higher increase that you can expect another one says chick score went up 46 points 12 days after
Signing up hasn’t even showed up on my credit report yet thanks for the advice now that one’s is a little strange to me because in 12 days i don’t think they had time to go and report to the credit bureau so this might not be quite correct i think another one goes i’m not gonna read the whole thing here but first payment in february and ever since then my credit
Score went up 40 points so there you go more point increases yeah another one goes i’m so grateful for your knowledge you have saved me 4800 dollars a year so far since i found you one month ago you’re so valuable thank you for blessing our family’s finances this actually doesn’t have much to do with self lender it has to do with my channel overall in terms of
All the other financial advice i put in my videos another one goes i also added a self lender account and added two more credit cards i went from three cards of five i did everything i learned in this video and my score went up 185 points in the last seven months this is why i make these videos is because i feel like a lot of people just don’t know how the system
Works just because some people don’t know how i works they end up with a really low credit score because they don’t know how to push the buttons as long as you do a few correct things like the tips i’m gonna show in this video then you can easily get a higher credit score the last one and again i’m not gonna read all of it the boost in points i received from self
Lender has allowed me to qualify for unsecured options now now this is what you want you want to boost your score enough so that you don’t have to get the secured option credit cards once your credit score is good enough you don’t have to pay for these options anymore you can ditch them and then you can improve your credit score the normal way and then it goes
On even my boyfriend who is very skeptical at first had to admit self lender delivered on their claims people can be skeptical because it’s this random website it’s not a big name-brand bank or anything and it goes over you’re gonna improve your score there’s a lot of places out there a lot of websites saying oh yeah you can improve your credit score or this or
That way so this is something that’s tried-and-true i showed you the comments people have gotten good results from it so let me go on with what it really is now now the self lender platform is sort of like a self lending loan you’re actually lending yourself money you put money into self lender and at the end you get most of your money back – some fees now why is
This good for people trying to get good credit is because when you put money in you cannot actually access that money they hold that money for you as collateral just in case you default because after all you do have bad credit and most banks cannot trust with the loan because you have a terrible credit score therefore this is essentially a no-risk thing for them
Because they’re holding onto your money if you default they can just take that money although you can get back most your principal – a fees so a self lending loan it’s not really lending you money at all is actually lending it to yourself however you cannot access that money that’s why they do not have to check your credit you can have bad credit no credit at all
Bankruptcies or whatever so this is why this is good for people with no credit over here you see a diagram for a self lender what happens is as soon as you sign up you have to pay a flat fee in order to start up this account this is like an administrative fee there are various plans that you can choose from but the recommended plan that i choose is the lowest total
Amount you pay self lender $48 a month for 12 months which is a one-year plan what self learner does is take this money and hold it in an fdic-insured bank and then at the end of 12 months they give most of it back for you not all of it which is 545 dollars the total you that you paid is nine dollars plus 48 times 12 which is $591 the total that you get back like
I said is $545 the difference between these two is $46 which is the fee that you end up paying self lender now you might go well $46 that’s a lot of money to pay in order to improve your credit score it is nonzero indeed but it is also cheaper than you paying an annual fee for a secured credit card now i have a lot of people come in and say hey can i just start up
This account and then maybe a month or two in i just completely pay all of it and see if you can get a better credit score right away the deal with this is no you don’t want to pay it off one or two months in what you’re trying to do is build a good credit history so you want to drag this on as long as the whole term is which is 12 months this is so that on your
Credit report it will show oh yeah you know you’re holding on to the loan you’re responsibly paying every single month and then it’s gonna show that you paid on time over a 12-month period which is very good for your credit score now because i have a really high credit score already i certainly don’t need something like this myself i’m not gonna pay 46 dollars just
To get my score even higher my credit score right now is 827 or so right now so this is not useful for me and not useful for anyone with let’s say 740 760 and above credit score but if you have a really low credit score you’re sort of in a pinch you’re kind of stuck and you don’t have anything else that you can do other than get a secured credit card get a credit
Builder loan from a credit union or get this self lending loan because you don’t qualify for an unsecured credit card you don’t qualify for the corps alone nor a mortgage now i want to warn everyone that this is an actual loan here this is not a play loan where you can just not pay and then it won’t have consequences because self lender does report to all three
Credit bureaus you can get bad credit from defaulting on this if you started off with bad credit it may show that you’re not very good with repayment plans so my recommendation is it’s best to start off with a lump sum of money in your checking or savings account so that you know you have this amount already before starting this credit builder loan if you’re living
Paycheck to paycheck and you suddenly try to start this and then go oh yeah $48 i can meet that eight months later or ten months later you might find yourself strapped for cash maybe you lost a job or something and then all of a sudden you cannot pay this anymore what you can do in that situation is you can go in there cancel the loan before you default on this and
You will not get a bad mark on your credit score let’s say you’re six months in you’re gonna get most your money back – a fees of course you’re not gonna get the nine dollar administrative feedback but you’re not gonna be charged a total of 46 dollars it will be something a bit less than this now if you’re late a full 80 days from the payment date they will report
To all three credit bureaus and you will default on this loan and it will be a bad mark on your credit report now you might look at this and go oh yeah they improve credit maybe they’re a credit repair company no self lender is not a credit repair company don’t go and ask them about credit repair or anything all they offer is these credit builder loans now other
Than this $48 a month time they do have other loan terms and other loan amounts for example they have four options now the first thing is a nine dollar fee twenty five dollar monthly plan which is a bit lower however to extend it to twenty four months instead by the time you’re done with all of this you would have paid a total of six hundred and nine dollars you
Would get five hundred twenty-five dollars back the total fee that they charge you is $84 now you might go well which option is best here the longer the better because then you’re going to have a longer history on your credit report and it will show up as all fully paid and it would be a positive for your credit score a lot of people ask well they have all these
Other options they have more expensive monthly option will that actually help improve your credit score more just because you pay more into this loan the answer to that is not very much at all what’s important here is that you have a loan at all and that you’re in good standing with that loan just because you pay twice as much let’s say the $89 plan does not mean
Your credit score will go up twice as much i would say it would go up a tiny a bit more so my recommendation here is that you can get like 99% of the benefit just by getting the lowest amount loan and in light of the lowest amount fee i would just do the one year the fifteen dollar fee forty-eight dollars a month for 12 months and the total fee would come out
To be $46 if after that one year and you still feel like oh yeah you can benefit for another round of self lending loan go ahead and get that again because if you get the 24 month term it means you’re locked in you have to go through with that whole thing and the total fee will be more expensive now at the end of this loan term the self lender thing is not gonna
Repeat this for you after you pay all of it in you can’t go okay you know it’s gonna automatically restart they’re gonna boot you out of this whole payment plan thing and then you’re gonna get your money back if you want to start up this thing again you need to reapply for another term what i recommend to do is of course to do just a one-year plan just wait and
See you might be very surprised how high your credit score becomes after doing just one year based on all those other comments i reviewed before after you’re done with all this i recommend it take this money and stick it in an online account and just save all this don’t go all free money i’m gonna blow it off on everything take this and put it in a savings account
You can get a pretty high interest rate by not going to your typical banks and just use online savings bank accounts these include banks like marcus synchrony or discover online now from marcus you can get like 1.6% a py right now now being a frugal channel where i normally don’t recommend people to buy anything or spend money on any kind of fees this is something
That you may need to do if you’re stuck at the bottom of your credit score you can most certainly do it the normal way the way i did it which is very very slowly just you your credit very responsibly always pay any kind of bills in full but you know what this took me an incredible amount of time like ten years or so in order to get it this high if you don’t have
The time to wait around well you need to pay a little bit more for faster service of course in order to get it higher you want to sort of inject good history in your credit report so in order to do that you have to pay a small fee now on top of all this if you look at this $48 and you can barely make this i would recommend to not do it at all it needs to be very
Very comfortable in order to make this amount and like i said i would prefer that you have let’s say six hundred dollars or more on top of your emergency fund it’s just sitting there on the side for you to contribute to this self lending account now after all this if you’re still interested in this self lending account i do have the referral link down below and i
Would very very appreciate it if you guys use it by using this link i will benefit from it you will be helping out this channel and at the same time you will be helping out your own credit score so thanks for watching everybody i have my referral link down in the video description below i have a patreon over here and don’t forget to subscribe thanks for watching
Transcribed from video
[SelfLender Sponsored] How to Build Credit By BeatTheBush
