You may know how to improve your credit score over time, but what if you’re on a tight schedule? Here are the eight best ways to build credit in a short amount of time:
1. Review your credit reports
The first step to improving your credit score lightning-fast is making sure creditors have the correct information. It’s possible that errors on your credit reports could be bringing your score down.
Get a free copy of your credit report from each of the three major credit bureaus – Equifax, Experian, and TransUnion – and thoroughly review the reports for errors.
You might see credit accounts you don’t recognize (a sign of credit card fraud), incorrectly reported late payments, or misreported numbers, like an incorrect loan balance.
You can also see if you have any collections accounts on your credit report and take action to remove them. If the collections account represents an error, gather your evidence (bank statements and account statements, for instance) and follow the credit bureau’s process for disputes.
Even if the collections account is correct – but you’ve since repaid the debt – you may be able to ask the creditor for a “goodwill deletion.” The creditor will review this request and can decide if they will remove the collections account from your report.
2. Become an authorized user
Becoming an authorized user on a credit card is one of the fastest ways to build credit. A trusted family member or friend can add you as a user to their card. Their responsible usage – low credit utilization and on-time payments – reflects on your credit report.
That means you can demonstrate responsible credit card management without opening a credit card yourself. That’s helpful if you’re aiming for a quick credit jump – opening a credit card on your own temporarily lowers your score.
Bear in mind that becoming an authorized user means you have the potential to affect someone else’s finances. You’ll get your own card to swipe as you please, but the primary account holder is responsible for the payments.
Be respectful as an authorized user. Ask before using the card, and pay your loved one back right away.
3. Use a secured credit card
A secured credit card may be the best path forward if you don’t have an established credit history or are trying to rebound from bad credit.
Secured credit cards are designed for borrowers with poor credit (or no credit at all). Many don’t even require credit checks. You’ll typically need to make a small security deposit as collateral, and then you can use the credit card for everyday purchases.
Secured cards often have a low credit limit to keep you from overspending. Pay off the secured card every billing cycle, and you should see improvements in your credit score in a matter of months.
4. Pay your bills on time
Payment history accounts for 35% of your FICO® credit score.1,† That means on-time payments impact your credit more than any other factor.
If you have late payments on your credit report, you won’t be able to get those removed (unless they’re an error). But you can commit to no more late payments going forward.
Prioritize paying your rent or mortgage, car loan, student loans, and credit card bills on time every month. If you have other monthly payments, like a personal loan, add those payment dates to your calendar, too.
You can set up autopay for certain accounts so you never miss a payment, but ensure your checking account has enough money to avoid overdraft fees if your account charges them.
If you’re overwhelmed by all the different payment dates, especially if you’re juggling multiple credit card debts, consider a debt consolidation loan or a balance transfer credit card to streamline your payment process.
5. Reduce your credit utilization
Credit utilization – the amount of available credit that you’ve actually borrowed – also has an impact on your credit score (30%).1 By reducing how much of your available credit you borrow, you can lower your credit utilization and raise your credit score.
Here are two simple ways to reduce your credit utilization:
- Pay down existing balances without taking on new debt.
- Only use your credit card for a few monthly purchases and pay it off in full that same month.
6. Treat your credit card like a debit card
When you swipe a debit card, the money is taken from your checking account. You typically can’t complete the transaction if you don’t have the necessary funds.
With a credit card, however, you can swipe freely (up to your credit limit), even if you don’t have the money in a bank account. You have to be vigilant: if you can’t afford to pay off your card in full, you’ll begin to carry a balance.
This means you’ll start accruing high-interest credit card debt, and your credit utilization will be higher than if you’d paid off the card in full.
Instead, treat the credit card like a debit card. Only use it for purchases you can afford and pay it off each month.
7. Ask for a higher credit limit
Getting a higher credit limit – but not spending more than you would’ve before – is a great way to reduce your credit utilization. High credit limits also signal to other creditors that you’re a trustworthy borrower.
There’s a caveat, though. Some credit card companies may perform a hard inquiry on your credit report when you ask for an increase, temporarily lowering your score.2 Ask your creditor about their process and rethink this strategy if they say they’ll do a hard credit pull before upping your credit limit.
8. Don’t close old credit cards
Having older credit accounts increases your average age of credit, another factor that goes into your credit score makeup.1 By keeping old credit cards open, you’ll maintain a higher credit age.
Keeping cards open may not be the fastest way to build credit, but closing them quickly lowers your score.
Some creditors may close cards after long periods of inactivity, so consider swiping your card once or twice a year to buy something small, like a pack of gum, and then pay it off right away.
Chime Tip: If a credit card has a high annual fee you’re struggling to pay, closing the card may make more sense, even if it does mean a minor dip in your score.