Are we starting or just chatting? [LAUGHS] PRODUCER: Both? Oh. [LAUGHS] Hi, I'm Lianne. And I'm a chartered professional accountant. I have tons of tips to keep your credit score high. [CHUCKLES] So I think the first thing is to understand how a credit score works and what are the components that actually drive what your credit score is. So some of it is made up of how often you pay down your debt on time.
One of the strategies you can do is really make that automatic, so have the dollars come right out of your account and pay it in full or at least the minimum but paying it on time. A day late is a day late. Some of it is a function of all your credit utilization. So if you have $10,000 in available credit, you want to use less than 30% of that.
It sounds kind of strange. They give you all this credit, but you don't want to use that at all. That is also a big driver of the credit that you have. When I was starting out, if I got a credit card, I would actually not even take it out of the envelope. Sometimes I would even just cut it as soon as I got it and put it in a drawer. So what that does is it says, you've got all this credit that they're giving you, but you're not using it.
And sometimes the next best place to start is to actually get your credit score. Knowing how they're made and knowing what yours is I think is the very, very first place to start. And also just knowing that you're not alone. This is a challenge for a lot of people in terms of getting their credit score up, making sure that they pay things on time, and making sure they don't use too much of their credit. Over time, the number will [? lift. ?] No one's meant to be perfect.
Your credit score is not a function of your financial health. It is just a function of how ready you are to borrow money. So to really not make it a big reflection on who you are but still know that it's something that you're going to have to work on in order to be successful for your business. So thank you for listening to these tips. I hope you found them very useful. You can check out some more videos in the Compass library. Woo.