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The single most useful trick to building and maintaining a great credit score for free! I’ll go into detail about why it’s important at the bottom of this page and answer all the questions that may come up.
It works because it creates the foundation of your credit report, something that is almost always overlooked by credit blogs and credit videos. Although It takes time, everyone, whether you’re new to credit, building your credit, repairing your credit, or just needing to maintain your credit, can use this trick.
The credit score secret: The Double Autopay Method!
I call this the Double Autopay Method! And it’s really quite simple. Here it is:
- Get a credit card
- Use it to pay one regular monthly expense with autopay – autopay #1
- Enroll your card in autopay with your bank account – autopay #2
What type of credit card should I use for the double autopay method?
- The credit card used for the double autopay method should be a card with no annual fee. You don’t want to pay to build your credit score.
- The credit card should have a $0 balance when you begin.
- Make sure the credit limit is at least 10x the monthly charge. For example, if the monthly charge you have is $10 then you need a credit limit of $100. Yes, a limit that small will still work!
You can find the perfect cards for this here.
How many credit cards should I use for the double autopay method?
Three. This creates the needed credit history and depth that credit score algorithms look for. Adding more won’t really help you. This does not include any cards that you use to make regular purchases. You want three cards paying your monthly bills and those cards being paid in full, automatically each month.
Can I use these credit cards for other regular purchases?
No. Absolutely not. The only reason to have these cards is to build your credit. You should not use them to pay for regular purchases. The one exception I would make is that you could use them in an emergency in lieu of getting a payday loan. But you should pay off the emergency expense with the same urgency you would with a payday loan. This will help you weather the emergency and save you a ton vs payday loans.
How does the double autopay method help my credit score?
There are numerous “factors” to a credit score which we can recite, but that would be a waste of time. Here’s the simple truth, a great credit score requires a history of on-time payments. The double autopay manufactures this payment history automatically over time.
Credit scores are highest when you show that you manage your debts and your credit well. The double autopay method creates a paper trail at the credit bureaus showing how you keep your expenses low and pay your bills every month.
Credit scores love low credit utilization rates. If you follow the instructions, the three cards you are using will have a utilization rate below 10%. This is perfect. Even more, if you have other cards that you use regularly with higher utilization rates, these cards will help bring your overall utilization down.
Credit scores like old, established accounts. Credit cards are open ended, meaning they can be kept open indefinitely. The breakeven for an account age is about 12 months. Accounts newer than that tend
Will I have to pay interest on the charges?
No. If you pay the balance in full each month, you will not incur interest charges on your credit card. If by some chance you have a credit card that does charge you interest on this program (I have never heard of one) then stop using it and get a new one.
What if I can’t get approved for a credit card?
If you can’t get approved for a standard credit card, a secured card will work. Secured cards do require you to provide a security deposit up front though. However, once you have established your credit with this method, getting new cards or upgrading your secured card to a standard card will be easier. You should expect this to take between 3 and 12 months depending on your current credit situation.