7 Ways to Build Credit Fast

A good credit score is important to have, but not everyone starts out with one. There are multiple benefits to having a good credit score, even if it is just below the high score! If you lack a good credit score in America, it can be challenging to get anything of value, especially if you are looking for a car loan. Your interest rates will end up being extremely high if you do not have good credit, leaving many people forced to only buy used cars instead of getting something they would like that is new. If you want to get into the market for a home or condo, you may find yourself left out because banks won’t give loans unless you have a perfect score! The following tips will help you gain a good credit score.

1. Get a secured credit card
A secured credit card is a great way to start building your credit. You secure the card with money in an account, so you can’t max out the card and not be able to pay it back without losing the money in your account. Usually, a small deposit is required, with a maximum amount you can deposit. It’s a great way to build your credit because the card issuer will report your activity to one or more of the three major credit bureaus monthly, helping your credit score rise over time as long as you make all payments on time and in full.

2. Get a Co-signer
If you don’t have any credit history or your credit is terrible, you might consider getting a co-signer. If your parents or other relative have good credit and are willing to put themselves on the line for you, they can vouch that you’ll make your payments every month, and it will help your score as well as theirs. This option may be limited by how much income your co-signer has as well as their credit history – if their score isn’t great, this won’t help much. A co-signer with a good credit rating can significantly improve your rating in no time, but it’s risky for the co-signer. This is because if you fail to pay, they will be legally obligated to do so.

3. Pay Bills on Time
For your efforts of improving your credit score to be fruitful, begin by making sure that you pay your bills on time. Timely payment is one of the most vital elements to have a good credit score, making it easier for you to enjoy great deals and incentives from lenders, such as low mortgage rates or reduced fees on loans. Late payments, on the other hand, affect your credit score negatively. For example, lenders will be able to access any late payment for more than seven years. On the other hand, your ability to pay bills on time is reflected immediately and is the main element VantageScore, and FICO credit rating systems use.

4. Settle Credit Card Balances in Full
To improve your credit, you must pay off the bills on time. However, this does not mean that you just settle for paying minimum balances because even if you do so every month, it will still hurt your credit rating. For example, say that you have a card with a limit of $1000 and an outstanding balance of only $200 after making two payments in full during a billing cycle. If you continue charging items worth more than your limit can cover and then pay only those required at the end-of-the-month deadline, lenders will eventually think twice about lending money to someone who always ends up owing them more than what they should give.

5. Become an Authorized User
Instead of getting a secured credit card to build your credit, another way to do it is by becoming an authorized user on someone else’s account. This process is simpler because all you need to do is ask the person who already has a solid credit score for their permission to make you an authorized user of their current card or account. Once they agree and you get added as one, make sure you use the account responsibly and pay all of your balances in full and on time every month. This is a great and easy way for those with low credit scores to ensure that you can still build up your credit rating even with just the slightest amount of credit history. Even if the account holder doesn’t give you access to their account or credit card, being listed as an authorized user will still be a massive help for your credit score and history.

6. Pay Off All Debts
Do not stop at ensuring that you consistently pay your bills on time; make sure that you also take the initiative to pay off all of your debts on time. To have a good credit score, showing lenders that you are responsible by tackling any debt owed will be very important. For example, if your credit card has a limit of $1000 and you owe only $700, try to send in more money so it would reach or even go beyond the limit instead of just settling for the lower amount being owed. This way, you will still have an excellent credit score despite just paying minimum balances.

7. Dispute False Information
The last way to make sure that you can improve your credit score fast is by disputing information that you know is not true or legitimate in any way. For example, it might be falsely reported because of one’s negligence, an error during data entry at the lender’s end, or as a result of identity theft. Whatever the reason behind the false information on your report may be, make sure to state all of those reasons in writing and send them directly to the Credit Bureau to have those mistakes corrected as soon as possible. By doing this consistently over time, lenders will eventually notice and appreciate how responsible you are by actively maintaining your credit history.