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There are numerous instances in your adult life where you may ask how to build credit quickly or improve the score you already have. Perhaps you see a home or taking out an auto loan in your future, and you know lenders will be reviewing your credit score. Or, maybe your credit score has taken a hit in recent months due to troubling economic conditions, and you want to explore ways to improve it (and fast). Whatever your motivation, there are several solutions you can start implementing today that can help improve or establish your credit quickly.
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How to build credit quickly
Let’s examine some of the most effective ways to influence your credit score.
1. Start by paying your bills on-time
Giving the advice to pay your bills on time may seem a little basic, but there’s a reason why this is so important: on-time payments make up the biggest portion of your credit score. It’s so big it makes up 35% of your FICO score, which is what most lenders reference when they pull your credit report. Any payment you make to a lender each month, such as for a personal loan, line of credit payment, or credit card payment, is reported to the three credit bureaus (Experian, Equifax, and TransUnion). Paying on time positively impacts your score, while late payments or missed payments can severely hurt your score.
One way to combat this is to set up automatic payment reminders or autopay to make the payment on or before the due date. If you’re struggling to make loan payments (including student loans, personal loans, or credit card payments) because your funds are tighter during certain times of the month or year, then you can call the provider to see if the due date can be modified.
Paying down your credit card balances decreases the amount of debt you have and improves your credit utilization ratio. This ratio is the amount of available credit versus your available credit. Lenders like to see a credit utilization percentage of 30% or less for each line of credit you have. This means that every month you pay towards your balance (without adding to it), lower your credit utilization becomes.
As mentioned before, automatic payments are another surefire way to ensure this happens each month. You can also make payments throughout the month to maintain a low balance. If your debt is higher than you like, you can take on a side gig, sell some of your belongings, put the earnings towards your debt, and decrease credit usage.
Your credit utilization is the second-largest factor impacting your score, so keeping it in check and your usage low can help you build or improve your credit quickly.
3. Ask for a credit limit increase
Not only does chipping away at your monthly credit card balances help the utilization rate, but you can also request a credit limit increase with your revolving credit lines. This can quickly increase your credit score because you’re lowering your overall credit utilization.
The key to this strategy is not to add to the balance, if possible. The higher credit limit is reported to the three credit bureaus the following month so that you can see a positive impact within a short period of time. Plus, you’re not opening any new accounts since it’s with a provider you already do business with.
One thing to remember with this strategy is that your credit score may slightly decrease when you call the credit card company and ask for a review. Often they will use hard credit inquiries to review your credit, which can decrease your score by a few points. If possible, you can ask the credit card issuer not to perform a hard inquiry. If that doesn’t work, the impact of the hard inquiry will likely lessen after about six months.
4. Become an authorized user
Another tactic to build credit fast is to become an authorized user for a family member or trusted friend’s credit card. An authorized user is added to an existing credit card account but isn’t responsible for making the payments. When you’re an authorized user, the credit card activity is reported on your credit report (which can increase or decrease your score). If the main cardholder makes on-time payments and maintains a low credit utilization, then it can positively impact your score, and you reap the benefits.
While you can see an impact quickly, you should only enter into this type of agreement with someone you trust and know has a history of making on-time and responsible payments.
5. Consider if a credit-builder loan is right for you
A credit builder loan is another way to improve your credit score, although this may be one of the few positive attributes. This type of loan requires you to make payments each month in installments however, unlike a personal loan, you don’t receive the lump sum payment until you’ve paid the entire loan amount in full.
The advantage of this loan is that it forces you to pay money each month, which will be made available to you later. Meanwhile, your payment activity is reported to the credit bureaus, which means you can quickly impact your score. These loans are typically geared towards those with no credit history, so they can be a gateway for establishing your credit.
6. Apply for a secured credit card
A secured credit card offers you the convenience of a credit card by establishing a credit line that you can charge against. However, unlike an unsecured version, the credit line is typically only as large as the security deposit you can put down. Your payment activity can be reported to the credit bureaus (but you should verify it does since not all secured credit cards do).
You can build your credit score by making on-time payments with a secured credit card. And with a lower threshold for approval, if you have no credit history or are challenged with your score, you can still qualify.
Even if you don’t have a credit score, you can try a service like ExperianBoost and boost it. If you make utility and streaming service payments on time, you could get credit for this activity and quickly improve your score. Experian looks at these accounts and includes the payments in your Experian credit score.
While ExperianBoost doesn’t work with the other bureaus or change your VantageScore, it can help your FICO score (which is the scoring model Experian uses). You may also be able to use your rent payments if the rental company reports payments to Experian.
FAQs
What is considered a good credit score?
Your credit score is a three-digit number assigned by the three major credit bureaus. Each credit bureau uses its proprietary scoring model for calculating your score and also has its own ranges they classify scores within. Generally, a credit score range is 300 to 850, but a good credit score is considered good if it’s above 700. You can access a free credit report annualcreditreport.com, and easily monitor your score and range.
Can I raise my credit score in 30 days?
With on-time payments and paying down your credit card balances, you could see an improvement in your credit score within 30 days. These are actually the fastest ways to improve your score. The good news is that your credit activity is reported every 30 days, so you can start making a positive impact fast.
How fast can I build credit?
If you already have a low credit score, you have a higher chance of improving your score than someone with strong credit. Since payment activity is reported to the major credit bureaus every 30 days, making on-time payments and paying loan and credit card balances down (or completely off) can quickly improve your credit score.
If you have a big financial goal ahead of you, such as buying a new home or car, and you know your credit score needs extra attention, then you can start working with these seven strategies to get your score in tip-top shape. With extra focus and minimal effort, you can see changes to your credit score quickly, which can help you achieve your long-term goals.
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Sara Coleman is a former corporate gal turned creative entrepreneur. She began writing professionally several years ago and now contributes to multiple websites, blogs, and magazines. She’s also an avid reader and can’t resist a great historical fiction novel. Sara holds a BA in journalism from the University of Georgia and can be found supporting her Bulldogs every chance she has. She resides in Charlotte, North Carolina, with her wonderfully supportive husband and three children. When she’s not ushering her kids to sports and dance lessons, she can be found creating content for her own website, TheProperPen.com.
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