PM's Self Reliance Tools: Good Credit-Getting it, Keeping it, Improving it

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If you’ve got great credit — congratulations!

(If your credit score stinks, check out this article for how to get out of the doghouse. And if your credit is meh, this article will help you get it into the stratosphere.)

But with great credit comes great responsibility.

What I mean is you want to continue to do the things that built up your credit score in the first place. And in many cases, you’ll actually want to step up your efforts — because when you start wielding your great credit, you’ll take on responsibilities and debts that will drive it back down.

Once your credit score passes 780 or so (out of a possible 850), a whole world of possibilities opens up.

Great Credit Use #1: Big Purchases

Getting a good rate on large interest-based purchases is often the entire reason you want great credit in the first place.

With your powerful credit score, you can get the lowest rate on mortgages — and access to some mortgage options that aren’t available to those with bad credit.

Now’s the time to buy a house… or refinance one, if you bought it a while ago when your credit wasn’t as good.

Now’s the time to trade in your jalopy for a new car... or, even better, a lightly used one that already suffered the big drop in value when it was initially driven off the lot.

You only want to make these kinds of purchases — anything large that you’ll pay off over time — when your credit is north of 780.

Whether you’re getting a new work computer, a bedroom set or an investment property in Cabo... Great Credit Use #2: Get the Best Credit Cards it while your credit is high.

Great Credit Use #2: Get the Best Credit Cards

You don’t have to look very far to find great credit card deals touted across the internet.

The sorts of deals that come with a ton of perks, including (but not limited to) bonus points or travel miles and benefits like sponsored Global Entry fees, access to travel lounges or free upgrades at certain hotels.

Exactly which credit card perks appeal most is a personal choice — you’ll have to decide for yourself. But now’s the time to decide.

Because many of the best credit cards aren’t available to those with weak credit. When you have strong credit, though, you can get your pick of the litter.

It’s true — your credit score will take a minor dip when you apply for new credit cards. You’ll get a credit inquiry ping — which has a minor negative effect on your score — and the average age of your credit history will dip.

Offsetting that, you’ll be adding a new account and increasing your credit line — both of which have positive effects. And consequently, you’re likely decreasing your credit utilization — the percent of your overall credit that’s currently owed as debt.

Decreasing credit utilization has a large positive effect. So though you might see a small dip from getting new credit cards, that will be offset in time.

To help speed up that process — and give you room to take advantage of the next credit use — call up your current credit cards and ask for an increase in your credit line. (In many cases, you can do this online.)

With a strong credit score, most cards will be only too happy to increase your credit line. That will help you keep utilization down — an important thing with our next move.

Great Credit Use #3: Leverage Your Credit

I want to be very clear — this is a great strategy, but only if you handle it responsibly.

If you aren’t sure you can trust yourself to keep track of everything, it’s a great way to lose money. So know your own abilities before you try this.

Caveat aside, here’s one of the most powerful ways to use a great credit score...

Take on some debt.

But not just any debt.

What you want to do is use a credit card that has a great balance transfer or cash advance offer.

With a great credit score, you’ll probably be able to find one that charges 0% interest for 12 or 18 months and a flat 3% transfer fee when you first take on the debt.

Then take that money and put it into a financial instrument you know will make more than 3%.

Here’s an example... Say you loan yourself $10,000 using a credit card advance offer with a 3% transfer fee. That $10,000 will cost you $300.

But if you take that $10,000 and invest it in tax liens paying 18%, you’ll earn $1,800 in a year.

Take away the $300 transfer fee and you’re still up $1,500. That’s money you’ve made — free and clear — for doing nothing more than wisely investing a personal loan.

Again, you have to be careful with this sort of move. Your credit card utilization will go up, which will immediately hurt your credit score (though it will return to normal once you’ve paid off the balance). So you don’t want to overuse this strategy.

Likewise, even though you won’t have any interest on your balance for 12 or 18 months, most credit cards will still require minimum payments on your debt. If you miss one, the penalties can quickly erase your earnings.

Not to mention — your credit score will plummet.

But if you pay the minimum each month… keep track of the loan you gave yourself... and make sure you pay it off before interest kicks in (and it usually retroactively applies interest for the interest-free months if you haven’t paid off your debt in full)… and wisely invest the money in something that more than covers your transfer fee…

Well, this is a completely free way to make money.

Once you’ve got that money, you can turn around and invest it in things that pay off even more, but over a longer period of time — like stamps, coins or other rare tangible assets.

It’s a no-lose situation. But only if you can be responsible. Miss your payoff date or get stuck with full interest and you’ll start losing money, not making it.

But having great credit suggests you can be responsible. So take advantage of your maturity and grab some free cash for yourself.

It will be well worth the temporary dip in your credit (as long as you don’t have any major purchases on the horizon). And once you’ve completed the cycle, you can do it again.

It’s a nice way to add a few thousand dollars to your pocket every year for nothing more than responsible calendar keeping.

And that’s a bargain if I’ve ever seen one.

Unconventionally yours,

Ryan Cole
Editor-in-chief, Unconventional Wealth

P.S. Not sure where to find the best credit cards for perks or balance transfers? Bearing in mind the advice I’ve given today is from me — and not from the banks that offer these credit cards — you can find a great list of the best offers today right here.

This Is The Credit Score You Should Actually Be Striving For

Mortgage lenders can use scoring models as old as FICO 2, while FICO 8 and 9 are the most commonly used FICO models, Rod Griffin, Director of Education at Experian, said. He considers the key score benchmark to be 750. “It depends on the type of score and the lender’s threshold,” Griffin said.

And just to add one more wrinkle to this whole situation, some scoring models have a top score that’s well into the 900s.

Extra Step Needed for Claimants in Equifax Settlement

Families Go Deep in Debt to Stay in the Middle Class

Cars, college, houses and medical care have become steadily more costly, but incomes have been largely stagnant for two decades, despite a recent uptick. Filling the gap between earning and spending is an explosion of finance into nearly every corner of the consumer economy.

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The European Central Bank announced a bonanza stimulus package: interest rate cuts, money printing, quantitative easing, the whole nine yards.

Europe’s economic growth has ground to a halt. The German economy actually shrank last quarter, according to official statistics.

So the European Central Bank is throwing everything including the kitchen sink at this problem. Their stimulus package is like a monetary defibrillator trying to shock Europe’s economies back to growth.

It’s pretty amazing when you think about it: interest rates in Europe are already NEGATIVE. They’ve been cutting rates for years, and it hasn’t worked.

Back in July 2008, the European Central Bank’s main interest rate was 3.25%.

By the end of 2008, it was clear the global economy was slowing down, and the central bank had slashed interest rates to just 1%.

But they kept going.

By 2013, the ECB had reduced its primary interest rate all the way to zero.

And in 2014, they took the unprecedented step of cutting rates even further-- to NEGATIVE 0.10%.

European rates have been negative now for FIVE YEARS. Yet Europe’s economies are still in the dog house.

These results completely defy prevailing economic wisdom.

According to the ridiculous playbook that nearly all central bankers use, cutting interest rates is supposed to stimulate economic growth.

If interest rates are lower, it makes it easier and cheaper for people to borrow money. If it’s cheaper to borrow money, people buy more stuff… which creates more economic growth.

They’ve been cutting rates, even below zero, to the point that you can actually get PAID to BORROW money in Europe. Yet those economies are still stagnating.

So the central bank’s solution? If what you’re doing isn’t working, do more of the same!

It’s astonishing how these economists cling their ridiculous theories...

Unsurprisingly, the European prices of both gold and silver shot up this morning.

Gold is now selling in Europe for nearly 1,400 euros as I write this letter--- an ALL-TIME high.

That’s because precious metals are a refuge from keeping your savings held hostage by unelected central bankers who can slash interest rates to negative levels and conjure unlimited quantities of paper currency out of thin air.

It’s not just Europe either.

Across the water in the United States, the central bank has already indicated that they’re going to start cutting rates as well… plus they’re facing pressure from the Tweeter-in-Chief to make interest rates negative, just like in Europe.

That’s a big reason why precious metals prices have been climbing so rapidly; in the past two months alone, the silver price is up 22%.

I’ve been talking about this for months, encouraging you to buy gold and silver. But this isn’t over. There’s a lot more monetary insanity to come from the United States and Europe… so gold and silver prices likely still have a lot of room to rise.

(Silver could actually triple in price, and it still wouldn’t beat its previous record high.)

One big driver of gold demand is actually coming from foreign central banks and governments. They can see what’s happening to the US dollar and euro, and they’re keen to diversify their reserve assets away from negative interest rates.

Russia has been on a gold-buying spree lately, gobbling up more than 18 metric tons of gold in the month of June alone, and nearly 100 metric tons since the beginning of 2019.

China has also added 100 metric tons of gold to its foreign reserves since the beginning of 2019.

Even the central bank of Poland has acquired 100 metric tons of gold this year, nearly doubling its gold holdings from last year.

This is a powerful trend that could continue sending prices higher. So it’s still a reasonable time to buy physical gold and silver.

A Final Note…

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