How to Build Credit Fast: 10 Proven Methods

It can be hard to build your credit fast, let alone get credit to begin with if you don’t have credit established in the first place. It’s a bit of a puzzle. But you have to start somewhere, and a secured credit card is a great way to build your credit score. These types of credit cards work just like a regular credit card but require an upfront deposit that serves as collateral for any purchases you make using the card. But one quick note before you apply - ensure the secured credit card you choose reports to the three main credit bureaus: Equifax, Experian, and TransUnion. 

Overall, getting a secured credit card is a smart way to help you build credit. 

2. Become an Authorized User on Someone Else’s Credit Card  

The truth is that it is hard to get credit if you don’t have a credit history. So, if you want to build your credit fast and have a trusted and financially responsible family member, a great option is to ask if they can add you to one of their credit cards as an authorized user. Once you have been added, be sure that you can cover your share of purchases and interest and contribute to the on-time monthly payment. Being on someone else’s credit card requires trust and communication, which is a good way to help you build credit quickly.

Overall, becoming an authorized user on a family member’s credit card is a great way to build your credit.

3. Watch How Much Credit You Use

It's human nature to want the best of everything. But living within our means and managing our finances responsibly is critical to building good credit and creating skills you can use elsewhere. So, here are a few tips to consider:

• Maxing out your credit limits can negatively impact your score. 
• Aim to reduce your credit usage to less than 30%. Low credit utilization can help quickly increase your score. 
• Before making a purchase, ensure you have the means to cover your minimum monthly payment increase.

Overall, being mindful of how much credit you use can build your credit score both in the utilization factor but in the new credit factor too.

4. Increase Your Credit Limit

If you already have a credit card, negotiating an increase to your credit limit can improve your utilization without changing your overall balance. To negotiate an increase, call your credit card issuer and let them know that you would like to increase your credit limit. However, please note that some credit increases may come with a hard credit inquiry, which could temporarily lower your score. 

Overall, being mindful before you call for a credit limit increase. Ensure first that you are prepared to take on the added financial responsibility. 

5. Apply for a Credit-Building Loan

Credit builder loans work a bit differently than traditional loans. These loans are designed to do one thing and one thing only - help you build your credit. This type of loan is usually for a small amount with a relatively short repayment period, six to 24 months. The money you borrow is put aside in an account while you make payments, and you receive the money back once you make all of the payments with interest. 

Paying off a credit builder loan helps build your history of on-time payments, positively impacting your credit score by about 35%. 

Overall, getting a credit builder loan is a good way to help you build credit. 

6. Pay Off Your Debt 

Paying off your debt should be a priority for any borrower. Many borrowers adhere to the 20/10 rule of thumb. Under this philosophy, consumer debt payments account for no more than 20% of your annual take-home income and no more than 10% of your monthly take-home income. So if your debt is beyond this guideline, taking the proper steps to pay it down is good to help improve your credit score and financial security.

When paying off your debt quickly, there are two tried-and-true strategies. The snowball method suggests you pay off the smallest of your loans as quickly as possible. Then, move on to the next one and follow the same approach. The avalanche approach focuses on paying the loan with the highest interest rate loans first. Both methods are highly effective and can help you pay off debt and save on interest.

We’d be remiss if we didn’t include a thought or two about accounts that might be in collections. And we recommend that you do not ignore these types of debts, as they can wreak havoc on your credit score. That said, one of the best ways to pay off a debt in collections is to contact the creditor and ask them for assistance in developing a repayment plan. Understand that the creditor's or debt collector's primary goal is to get all or some of the money owed to them. Therefore, you might attempt to negotiate away some of that debt by making a lump-sum payment or committing to a long-term payment plan.

Overall, paying off your debt is a good strategy to lower your monthly payments and save on interest.

7. Make Sure You Get Credit for All of Your Payments 

While most creditors will report to the credit bureaus, not all companies that you might pay every month do the same. For example, credit bureaus don't automatically collect information about rent payments. That said, some landlords report payment today; in that case, the data is included in your credit report and reflected in your credit score. Another option is to pay your rent with a credit card or sign up for a service such as Experian Boost that lets you get credit for paying monthly utility, cell phone, and streaming service bills on time. You can even get credit for streaming payments on Netflix, HBO, Hulu, Disney+, and Starz.

Overall, paying your monthly bills with your credit card each month can have some benefits if you are managing it responsibly. Signing up for a service such as Experian Boost is also a good way to help you build credit. However, if you use your credit card for these payments, ensure this doesn’t throw your utilization over 30%.

8. Dispute Errors on Your Credit Report 

As a best practice, you should review your credit report at least once per year. The Fair Credit Reporting Act requires that consumers can get free access to their credit report once annually. You can access your credit report through one of the bureaus (Experian, Equifax, or TransUnion) or annualcreditreport.com. Review your credit report carefully and understand that an error on your report could dramatically impact your score.

Some of the most common errors found on credit reports include:

• Balance errors: accounts that show an incorrect balance
• Identity errors: Issues relating to identity theft or accounts on your report from someone with a similar name
• Inaccurate accounts such as an account listed as delinquent
• Credit bureau thinks you are deceased

If you see an error, file a dispute with the applicable credit reporting agency. Experian, Equifax, and TransUnion all have dispute-filing processes that are easy to follow. If you successfully dispute an error, it can improve your credit score.

Overall, checking your credit report each month can have some benefits if you know what to look for. 

9. Get Help

It can happen to the best of us; our finances get out of control. And we know how hard it can be to improve your credit when struggling to make ends meet. If you need help, know that credit counseling helps borrowers learn more about consumer credit, money management, debt management, and budgeting. You can find a reputable credit counselor at National Foundation for Credit Counseling or The Federal Trade Commission.

Overall, credit counseling can help if you have run into financial help and need to get reorganized in your approach. Though it may hurt your score initially, the goal is to learn better behaviors to improve your ability to manage credit in the future.

10. Maintain Good Habits

Last but not least, one of the best things you can do to build credit fast, if not work your way towards an excellent score, is to maintain good habits. Following these straightforward guidelines can make you eligible for a personal loan for excellent credit down the road.

• Pay your bills on time every month
• Avoid using your entire credit limit (keep your utilization under 30%)
• Manage your debt and don’t take on more debt than you can handle
• Keep your oldest accounts open and don’t use them for spending

Maintaining good financial habits can pay off in the long term, providing you leverage for lower interest rates and more flexible borrowing.

What Factor Has the Biggest Impact on a Credit Score?

Your credit score is comprised of five factors weighted based on their importance.

• Payment history, 35%
• Amounts owed (utilization), 30% 
• Credit history, 15% 
• Credit mix,10% 
• New credit,10% 

Paying your bills on time every month is the single most important thing you can to not only build credit fast but work towards a good credit score of 670 or higher.

Essential Habits for Boosting Your Credit Score in the Long Run

Building credit fast is only the first step in establishing and maintaining a credit history to be proud of. Consistent positive behaviors are the best way to build and maintain good credit. Additionally, adopt these healthy habits to help you maintain good credit throughout your lifetime. 

• Pay your bills on time every month.
• Avoid maxing out your credit cards (keep that utilization under 30%).
• Manage your debt-to-income ratio. A general rule of thumb is to keep your overall debt-to-income ratio at or below 43%.
• Ensure you can make the payments before you take on more debt.
• Check your credit score regularly and review your credit report at least once yearly.
• Keep credit lines open after you pay them off.
• Take steps to prevent identity theft. 
• Put money into an emergency fund each month so you are never caught red-handed if bills get tight.

Final Word

We’re hopeful that with the tips provided in this article, you have a good grasp on what it takes on how to build credit fast. The key to building credit really lies in your ability to make wise financial decisions. Pay your bill on time, monitor your spending, and be patient. Though these tips can help accelerate the improvement of your credit score, building a reputable credit history takes time.

• How to Improve Your Credit Score
• What Is a Good Credit Score?
• Free Resources to Help Improve Your Credit
• How to Calculate Credit Card Utilization 
• Disputing Errors on Your Credit Reports | Consumer Advice
• Targeting Credit Builder Loans | Consumer Financial Protection Bureau
• Here’s How to Get a Credit Limit Increase and Raise Your Credit Score in Under a Minute