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Personal Finance > Credit Cards
Credit Cards

How to Build Credit Fast

By Michelle Lambright Black MONEY RESEARCH COLLECTIVE

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Building good credit is a marathon, not a sprint. Yet if you’re anxious to enjoy the benefits that good credit can bring you, there are some time-tested actions that might help speed up your credit-building journey.

The guide below walks you through seven strategies you can use to try to build your credit quickly. You’ll also find tips on some of the credit-related mistakes you should try to avoid.

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How to Increase Your Credit Score Quickly

When you’re building credit from scratch, it may take six months or more to see the results you’re hoping to achieve. If you’re trying to rebuild a damaged credit score, sometimes the process can take even longer.

However, the following seven tips have the potential to help you increase your credit score quickly. Depending on your situation, these actions might give you a slight head start or, if you’re lucky, boost your credit-building efforts to light speed.

Pay your bills on time

The first key to any successful credit improvement strategy is to make your monthly payments by their due date. The biggest part of your FICO Score (35%) is based on payment history. With VantageScore credit scores, payment history has a big influence as well.

To be fair, paying your bills on time won’t cause your credit score to skyrocket immediately. Yet avoiding late payments or missed payments can help you avoid the credit score setbacks that such mistakes can cause.

Maintain a low credit utilization rate

Credit scoring models, like FICO and VantageScore, place a lot of emphasis on a factor known as your credit utilization rate. Credit utilization measures how much of your credit card limits are in use. If you owe $5,000 on a credit card with a $10,000 limit, your credit utilization ratio is 50%. It also measures how much of the total available credit you are using across all accounts.

Maintaining a low credit utilization ratio is imperative for borrowers when they’re trying to build credit. In other words, it’s important to keep your credit card account balances low compared to the credit limits on those accounts.

If you already owe outstanding credit card debt, paying down those balances might improve your credit score in a hurry. Note that paying down other types of debt could benefit you financially, but you typically won’t see the same type of credit score results.

Fix any credit report errors

Credit reporting errors are more common than most people realize. According to a Federal Trade Commision study, 25% of consumers (one in four) identified errors in their credit file that might depress their credit scores.

You can obtain your reports from all three major credit bureaus (Equifax, TransUnion, and Experian) at AnnualCreditReport.com. Thanks to the Fair Credit Reporting Act (FCRA), you can use this website to perform a free credit check with each credit bureau once every 12 months.

After downloading your credit report from each bureau, you’ll want to check them for errors. The FCRA allows you to dispute credit report mistakes with the appropriate credit bureau.

There are no guarantees, of course. But if a credit bureau removes a negative, inaccurate item from your credit report, your credit score might improve. Depending on your situation, the potential credit score improvement from this credit repair strategy could be meaningful.

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Become an authorized user on a credit card

Another possible way to build credit is becoming an authorized user on a loved one’s or family member’s credit card. Depending on its credit reporting policy, a credit card company may share account information with the three credit bureaus for primary cardholders and authorized users alike. In other words, the credit card might show up on your credit reports too, once you’re an authorized user.

If a credit card has positive payment history, your credit score may benefit if and when it appears on your credit report. Becoming an authorized user on a credit card with high credit utilization or late payments, however, could hurt your credit score instead.

Get a secured credit card

When you’re trying to build excellent credit or repair bad credit, qualifying for a traditional unsecured credit card can be a challenge. If you’re willing to put down a security deposit to open a secured credit card, however, you may find that a credit card issuer is willing to work with you.

If you wish to use this strategy for building credit, remember that responsible credit card management is key. On-time payments and low credit utilization are a must if you hope to earn a good credit score.

Ask for a higher credit limit

Higher credit card limits could also work in your favor when you’re trying to build credit fast. Remember, your credit limit is one part of the equation when a credit scoring model calculates your credit utilization rate. If you can’t afford to pay off all of your credit card debt right away, a higher credit limit might drive your utilization rate downward (and perhaps your credit score up in response).

You can ask your credit card company for a credit limit increase. The longer your account has been opened and you’ve managed it responsibly, the more likely your card issuer may be to approve the request.

Apply for a credit builder loan

Certain credit unions and online lenders offer credit-builder loans to consumers who are looking for ways to build credit. As with secured credit cards, these types of loans tend to feature less stringent approval requirements.

When you open a credit builder loan, you don’t receive the loan proceeds right away. Rather, the lender holds the funds in a separate bank account. Once you repay the loan balance plus any interest and fees, you should be able to access the funds you borrowed at that time – plus whatever interest may have accrued on that money.

You will want to make sure that the lender will report your credit builder loan to all three major credit bureaus before you apply. Otherwise, the account won’t have the ability to help you reach your goals of building credit.

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Credit Building FAQs

How is your credit score calculated?

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Credit scoring models calculate your credit score by reviewing the information on your credit report. A scoring model is essentially a complex piece of computer software that analyzes your past credit history and makes a prediction about your future credit behavior.

For example, if you've made a lot of late payments in the past, a credit scoring system will predict that there's a higher probability of you paying late in the future. In this scenario you'd likely earn a lower credit score than you would if your credit report showed only on-time payments.

Learning how to read a credit report and understand your credit score is important. Once you know how your credit score is calculated, you'll be better prepared to work toward earning and keeping good credit.

What is a good credit score?

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The credit scores that most lenders use in the United States (FICO and VantageScore) range from 300 to 850. Higher credit scores indicate less credit risk. In other words, they tell lenders that you're less likely to pay a credit obligation 90 days late or worse during the next 24 months.

According to Experian, a good credit score is any number between 661 to 780 on a VantageScore credit scoring system. A good FICO Score ranges between 670 to 739.

How can you check your credit score?

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You may understand how to get a credit report. But checking your credit score can be a bit more complicated (and sometimes more expensive).

There are several ways to check your credit score. If you don't mind paying for a credit score, you can visit myFICO.com or any of the credit bureaus to make a purchase.

For free credit scores, you can check to see if your credit card company offers this cardholder perk. Many do. Otherwise, you might be able to access free credit scores online from websites that market financial products to consumers.

How many credit cards should you have?

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There's no such thing as a perfect number of credit cards. You can earn a good credit score with one credit card, a dozen credit cards, or even zero credit cards. What matters most is not the number of credit cards in your wallet, but how you manage those accounts.

If you pay your credit cards on time (and better yet in full) each month, your credit score may benefit. Make late payments or overspend, however and your credit score may suffer. You also risk wasting a lot of money on expensive interest fees.

Summary of How to Build Credit Fast

Michelle Lambright Black

Michelle Lambright Black is a nationally recognized credit expert with two decades of experience. Founder of CreditWriter.com, Michelle's work has been published thousands of times by FICO, Experian, Forbes, Bankrate, MarketWatch, Parents, U.S. News & World Report, and many more.