Building credit fast is a challenge for many people, especially if you're starting from scratch or have poor or no credit history. This can be a time-consuming and frustrating process, but is essential to your financial future. A good credit score is important for many financial objectives, such as renting an apartment, purchasing a car, getting a loan, or even getting a mobile phone contract.
You can speed up the process by using smart tactics. Here are a few of the best and fastest ways to build your credit.
1. Pay all your bills on time.
The single most important thing that can affect your credit rating is your ability to pay your bills on schedule. Your credit score can be negatively affected for years if you pay late.
2. Avoid credit card debt.
You should keep your credit usage ratio as low and as consistent as possible. This is the percent of your available credit that you use on revolving account types, like credit cards and credit lines. Having a credit utilization ratio above 30% can negatively impact your credit score.
3. Ask for a higher credit limit from your credit card issuer.
You might qualify for a bigger credit line, if you have consistently paid your bills on-time and are a loyal customer. Check your card's policies before you request an increase. Some card issuers may perform a hard credit inquiry that could temporarily lower your score.
4. Use a secured credit card to build your credit faster.
If you're new to credit, using a secured card can be an easy way to build credit fast and establish a positive payment history. Secured cards often offer a lower credit limit and a refundable security bond in exchange. After a certain period of responsible card use, it is possible to exchange your secured card for one that's unsecured.
5. Benefit from the free services provided by credit agencies.
There are plenty of free resources for establishing your credit, including websites that can help you request free copies of your credit reports from the three major bureaus: Equifax, Experian and TransUnion. You can use credit agency services for disputing inaccurate information and getting your scores fixed.
6. Credit report cleaning is a great way to fix errors and late payments.
It's no secret that mistakes on your credit report can be a huge detriment to your score, and it's easy for them to go unnoticed and undisclosed. It's important to check your credit report regularly for errors, and to file disputes in order to correct them.
Taking steps to resolve any errors or missing information on your credit report can have an immediate positive impact on your credit. Depending on the number of errors and your overall credit profile, disputes can be the fastest way to improve your score, potentially increasing it by 100 points or more.