Want to Know the Fastest Way to Build Credit? We Have 6 Ideas!
We know there are many reasons you want a good credit score — and that you want that good score sooner rather than later. You are wondering if there is an ultimate best way to build credit fast.
We are here to show you there are actually six ways to build credit fast. In this list, you are sure to find the best way to build credit fast for you.
This is this year’s guide on the fastest way to build credit. We have options to build credit fast for people with a long credit history. We also have options to build credit fast for people with no credit history.
When you read through this guide on easy ways to build credit, you will learn:
- The basics of credit (and what credit score to aim for as you build credit fast)
- A list of various ways to build credit fast
- A realistic timeframe of when you can expect your credit to improve (is the fastest way to build credit really fast?)
By the end of the guide, you will know what the quickest way to build credit is for you. Actually, you may see there are multiple easy ways to build credit and can get started immediately.
Understanding Credit 101
Before you learn the fastest way to build credit or an easy way to build credit, let’s take a closer look at credit scores. Your credit score is a three-digit number that reflects how “trustworthy” you are for a lender to give you credit.
Here is a basic run through of credit score categories:
- 750 and more = Excellent credit
- 700 – 749 = Good credit
- 650 – 699 = Fair credit
- 550 – 649 = Poor credit
- 550 and lower = Bad credit
Image Source: Pixabay
When your score falls into a higher category, you have better options when it comes to:
- Buying a home
- Buying a car
- Opening a credit card
- Receiving a loan
- Getting a lower interest rate
- And more
Because your credit score affects so many aspects of your life, many people want to build credit fast. Not only that, they also want easy ways to build credit. Keep reading to learn the easiest and fastest way to build credit for you.
Ways to Build Credit Fast
Now we will show you the fastest way to build credit. The following ways to build credit fast are not the only methods available for building up your credit, but these are easy ways to build credit with some of the quickest results.
Without further ado, here are the six best ways to build credit fast.
Without a doubt, the #1 quickest way to build credit is to see if there are any mistakes on your credit report. A credit report mistake can bring down your credit score dramatically.
Here’s how to implement this easy way to build credit:
- Request a free credit report (you get three free ones each year)
- Look for errors
- If you find an error, simply report that error to the agency.
- When the error is removed, you will have an improved credit score.
This is not a method to build credit fast; additionally, it will not work if you have no credit (nor will it be helpful if there are no mistakes). However, it should be the first thing you check as you apply these best ways to build credit fast.
Boost Credit Limit
This next easy way to build credit fast may seem counter-intuitive: ask your credit card company to raise your credit limit. You may be thinking – is more credit a good idea when you’re already trying to build credit fast?
It is…but only if you can handle it wisely. It can actually be the best way to build credit fast with little effort on your part. It works like this:
- One of the factors that determines your credit score is your “utilization rate”
- A utilization rate is the ratio of available credit vs. the credit you have used
- Your utilization rate should be under 20% for an optimal credit score
- If you cannot pay down your debt quickly enough, there is another way to lower that utilization percentage
- By asking for a credit limit boost, you can also bring down that utilization rate
Say you have a $1,000 limit and $400 in debt. Your utilization rate is 40% – too high for a good credit score. If you ask to raise your limit to $1,600, your utilization rate is automatically dropped to 25% without having to pay anything off.
If you pay off $100 after that, you are under your 20% utilization rate. As you can see, this is why asking for a credit limit boost can often be an easy way to build credit.
Keep Cards Open
You may think that the best way to build credit fast is to close all your credit card accounts. But that is not the case. If you are on a mission to build credit fast, you will actually need to keep those cards open.
Here is why one of the best ways to build credit fast is keeping your card:
- Diversity of credit is a positive on your credit report, so keeping the credit card adds to that factor.
- A bad payment history will stay on your credit report for years, even after you close the card.
- However, years down the road, it will be removed from your credit report, and then you will have a shortened credit history.
- When you close a credit card, your utilization rate will rise. (Example: You have $10,000 in credit limits and $2,000 in debt.If you close your card with a $5,000 credit limit, your utilization rate goes from a decent 20% to a 40%.)
This does not mean, however, that you should continue to rack up debt on that card. Building more and more debt is definitely not one of the ways to build credit fast.
Make a Plan to Pay
One of the most important ways to build credit fast is making a plan. This plan should help you:
- Pay down your debt
- Pay all your bills on time
When you pay down your debt, you build credit fast due to that utilization percentage. And when you pay your bills on time, you build credit fast with an improved payment history.
Image Source: Pixabay
For some people, this can be as easy as setting reminders on your phone to pay your bills. This is helpful for people who have the money available but simply forget about payments.
For others, you may need to come up with a detailed budget to make room for extra credit card/loan payments. This is for people who are normally bogged down in debt but do not have much extra income to pay it off.
If you are trying to implement the best ways to build credit fast, but you are not sure how you will be able to pay down your debt or even pay your bills, reach out to your local government to see if there are any aid programs to help you out.
Make Frequent Payments
This next quickest way to build credit requires that you have some extra money at all times, but it is a great trick when you are implementing the best ways to build credit fast.
Whenever you make a big purchase on your credit card, you instantly throw off your utilization ratio (that big no-no when you want to build credit fast).
Even if you pay it all off before the end of the month, your credit reporting may have already gone through with the high utilization rate.
To prevent this from happening, make a goal to pay off your credit card at least twice a month. That way you always have a strong utilization ratio.
Once your credit is excellent, this probably will not be as big of a deal. But when you are in the “build credit fast” mindset, it is a good practice to be in)
Open a Secured Card
So far, all of our ways to build credit fast have focused on improving a credit score that is already in existence. For people with no credit (or extremely bad credit), these options may not be very helpful.
If this is you, one easy way to build credit is to open a secured credit card. This is different than your average credit card. Its main purpose is to build credit fast, like this:
- You will give the credit card company a deposit as collateral
- That deposit amount will be your credit limit (this means that if you fail to pay, the credit card company will not lose out)
- You will then use the secured credit card as you would any other credit card
As you make good payments on the secured credit card, you build a good payment history and you build credit fast.
Can You Really Build Credit Fast?
You may be wondering: “Is the fastest way to build credit actually fast?” The answer to this question is mixed: yes and no. The process of building credit is never overnight, but these ways to build credit fast are some of the quickest options you will find.
Even the quickest way to build credit can only build your credit score at a certain speed. The worse your credit history is, the longer it takes to build credit.
Experian, one of the credit reporting agencies, says building up your credit can take a few months for some people and a few years for others. It truly depends upon your current situation and how consistent you are with the best ways to build credit fast.
But when you focus on each easy way to build credit quickly, you will make the wait time as short as possible.
Conclusion – Build Credit Fast…Starting Now
The great thing about the fastest way to build credit is that you do not have to wait to start any of these methods.
See which ways to build credit fast apply to you and start implementing each and every one of them right away.
Be patient as you go and remember the quickest way to build credit will still take some time. But with consistency in these best ways to build credit fast, you will build credit fast and end up with a much better credit score than you started with.
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