www.TravelHackingPodcast.com/25
www.TravelHackingPodcast.com/Caribbean

The number one thing that handicaps new travel hackers is the concern about your credit score.

It's a valid concern but what I'm finding is that not everyone understands what their credit score is made up of to begin with.

So how is anyone even going to become a travel hacker without knowing the basics? I have your answers in this episode.

Featured Sponsor: Cheap Caribbean, where you'll find up to 70% off on all-inclusive deals including your flight!

Disclaimer: I am NOT a financial advisor NOR is this content to be taken as financial advice. This is only to be informational and, perhaps, even entertaining (I try) but it is by no means to be taken as financial advice. You are solely responsible for your own actions.

The story begin how I got started in travel hacking is it all started with obsessively reading The Art of Non-Conformity blog by Chris Guillebeau back in 2008 when I was slaving away at a sales job while my mind drifted off in far away places.

At first, I was super skeptical. I thought, how could this be? You must be rich in order to travel that much.

Obviously, by now, I've since learned that isn't true and if you leverage very HYPER specific things in your life, it can result in a ridiculous amount of free travel.

The very first thing you need to know about is your credit score and how it works.
Again, I am NOT an expert and I am only sharing from personal experience.

Subscribe on iTunes
Subscribe on Stitcher
Subscribe on SoundCloud

Quick Tips

Open an account on CreditKarma.com and download the app on your phone so you'll always know your score while simultaneously stalking your love interest on Facebook!
Learn what affects your score and why.
Utilization rate: The more you spend, the higher your rate.
Hard pulls: The more you have your score checked, the more hard pulls happen.
Account age: The older your open accounts are, the higher the average over age of your credit history is.

Here's How I've Played This Game

I apply for 3 cards at once. Why? I want my hard pulls to be around the same time so when they're off my record 2 years from now, the 3 hits that come off will shoot my credit score up significantly.
For cards I ended up deciding to get rid of (for whatever reason but most people just don't want to pay for the annual fee), I call the 800 number on the back and I deploy 2 strategies:
Downgrade to a card without fees and keep the account open. You can actually request that, for whatever reason, whether it's you no longer find the card with the annual fee valuable or you just simply don't want to pay it, you can request to have the bank downgrade the account to a non-annual fee card. Then, I'd just leave it alone so I can keep it for credit history purposes.
If downgrading the card is not possible, as is the case with the Bank of America Alaska Airlines card, and you want to cancel the card to avoid the fee, here's what I've done: Request to have the credit line transferred to another card of the same bank. They can't transfer the entire credit line but I would maximize it. In my case, I transferred $3,500 of the $4,000 credit line to another Bank of America credit card. Then I canceled my Alaska Airlines card. The reason why I did this is two fold: 1. To maintain my utilization rate because if I canceled the card AND the entire $4,000 credit line, my utilization rate goes up because I cut myself at the knees with my overall credit line (the amount of credit line you have when you add all of your cards together). 2. I avoid the fees by canceling the card I no longer want and the effects of my credit score minimizes as a result.

The key thing here, for me at least, is that small day-to-day variations in your credit score are not as important as the specific factors that shape the strength of your credit worthiness overall.

Your score fluctuates regularly 3 to 10 points everyday and I have not found a solid reason why that is.

What I like to focus on is to control the controllables and let go of the uncontrollables.

And the results speak for themselves as I've been able to do this since 2006.

The biggest concerns are to minimize your utilization rate (which also means if you use your cards a lot without paying your balance in full, you will have a higher utilization rate) and plan ahead when you decide to apply for promotional sign up bonuses.

Now, it's up to you.

Happy Memorial Day.

Cheers.
-Kevin Le






***P.S. For a very limited time, I am opening up ultra exclusive and personalized one-on-one travel hacking concierge services.

Email me direct at Kevin@TravelHackingPodcast.com if you'd like me to work with you for 3 months (90 days).