no credit to 750 credit score with 100k credit limit in 2 years!

[Nick Garofalo]

I went from no credit with 2000$ available credit to a 750 credit score with 100k available credit in 2 years. I started 2 years ago with no credit and having a hard time getting 2 1000$ credit cards from my 2 banks. After receiving my 2 cards I spent the first year just normally using my cards not trying to build my credit or anything. After one year of using my cards both banks increased my limit to 5k and thats when i realized i could really build my credit and over the next year went from 10k to 100k available credit with a credit score of 750. I did this with a low income as well. This is how i did it in steps!

Building you credit is very important for real estates investors. Having a good credit score will help you get loans, mortgages and help you refinance properties. Having a high available credit will also come in handy to fund rehabs and for unexpected expenses on your income properties. 

Step 1.

First step is obvious but pay your bills on time every time. cell phone, internet, loans, mortgage, rent, utilities, car loans , student loans, insurance and any other bills you may have pay all your bills on time.

Step 2.

Second step is to improve your credit utilization ratio. Your credit utilization ratio is the amount of credit used on your total available credit. For example if your limit is 10k and you owe 5k your utilization ratio is 50%. your goal is to get this to under 20% and ideally under 10%. You can improve you credit utilization ratio by paying down debt or increasing credit limit and you should do both. paying lump sum of debt and applying for a new credit card or increasing your current card limit and getting your credit utilization ratio down below 20% will have a big impact on your credit score.

Step 3.

The third step is to take advantage of reward credit cards. There are many cash back credit cards that have 21 day grace period so putting all your spending on reward credit cards and paying the cards off every 2 weeks will help you build credit, pay no interests on your purchases and earn rewards on your purchases. I applied for 3 reward credit cards and put all my spending on them. The first card i got is the cibc dividend platinum that pays 4% cash back on gas and groceries. The second card i got was the tangerine cash back card that pays 2% cash back on recurring bill payments, drug store and restaurants. The third card i got was the WestJet RBC Mastercard that pays 1% back on all purchases, I use this card for all purchases that do not fit in the 2 other cards categories. By putting all my spending on these cards and paying them off every 2 weeks I am building my credit, paying no interests and earning around 350$ a year in cash back alone.

Step 4.

The fourth step once you have multiple credit cards and follow all the steps above is to start increasing the limit of each card. If you follow all the steps above many of the credit cards will automatically pre approve you for credit limit increase or you can request credit limit increase. Since i had 5 credit cards it only took 2 limit increase on each card to reach the 100k limit in 1 year.

[Ryan Blake]

@Nick Garofalo

Thanks for this info. Copy and past it. People are asking this question all the time. I know I am going to save this link because you worded it so well and laid it out plainly.

So happy to hear how well you are doing now!