TikTok’s Humphrey Yang: Beware of This 1 Common Mistake That Can Ding Your Credit Score

©Humphrey Yang

Amassing 3.3 million followers on TikTok as @humphreytalks, Humphrey Yang is a finance social media influencer. An ex-financial advisor with multiple successful businesses under his belt, Yang’s goal is to make difficult financial concepts easy to understand for the average consumer.

Recognized by GOBankingRates as a Top Money Expert, here, he provides essential advice on maintaining a good credit score.

Want to vote for Humphrey as your favorite money expert? Click here and go to his expert page.

What’s been your most popular video and why do you think it has resonated with so many viewers?

This one or this one.

It’s an analogy of shorting a stock. I think it breaks down a tough concept into simple-to-understand terms! This video got 15 million views on Tik Tok, 45 million on YouTube, and millions on Instagram. It’s probably been viewed 60 million times. 

You’re passionate about increasing financial literacy. What topic do you wish people were more informed about and why is it so important to have an understanding of this topic?

I wish people knew how badly your credit score would drop even if you just miss one on-time payment to your card or existing debt obligations. I think it’s hard to understand because it’s not really taught in school, and people think that if you miss a payment it’s not a big deal.

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Another one in the same pillar is the 30% utilization rule for credit. Credit bureaus will ding your score if you use too much credit, which is counterintuitive.

There’s a lot of great financial advice on TikTok – but also a lot of not-so-great advice. How can viewers determine what advice they should and shouldn’t follow?

It’s hard to find the creators with credible advice. I would recommend viewers watch 5-10 videos from a creator and try to see what they’re about. If they’re trying to sell you something – that’s usually a bad thing, if they’re promising crazy returns – same thing. Personal finance and investing is about discipline, not overspending, being reasonable, and TIME.

What’s the worst financial advice you’ve seen being given (on TikTok or elsewhere) and why is this bad advice?

That whole life insurance is a good investment for the average person. You pay a very costly monthly premium, or fee for life insurance, and that fee is often in the hundreds of dollars per month. The average cost of a premium monthly for a 30-year-old that is healthy is $421 dollars per month. That’s about $5,000 a year. The premiums go to funding three things:

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1) Your own death benefit coverage

2) Your salespersons’ commissions

3) Your “cash value” – this is what’s different about whole life insurance that salespeople will try to convince you of. They’ll say it’s a savings component that you can invest and grow with tax advantages, but the thing is, your monthly premiums that you pay for the first five to 10 years you have whole life [insurance] barely even go toward this cash value, they in fact go to paying none other than your salesperson in the form of commissions as well as administrative fees, and funding your own death benefit insurance coverage.

Term life insurance is better. The situations in which whole life [insurance] is good are very [rare].

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Jaime Catmull contributed to the reporting for this article.

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