Many people struggle to build up credit fast. This is particularly true if their credit history or credit rating are poor. This process is not only time-consuming but also frustrating. Having good credit is necessary for a variety of financial goals, including renting an apartment, buying a car, securing a mortgage and even getting a cell phone contract.
You can use smart tactics to accelerate the credit building process. Here are some of the best ways to build credit and the fastest way to improve your score:
1. Make sure you pay all bills on time.
It's not just a matter of convenience: paying your bills on time is the single most important factor that affects your credit score. Paying your debts late can be a big mistake that could hurt your score for years.
2. Avoid high balances when using your credit cards
Credit utilization ratio should be kept as low a possible. It is the percentage you use of your available credit for revolving debts, such as lines of credits and credit cards. Credit utilization ratios above 30% will negatively impact your score.
3. Request a higher limit on your credit card.
You could get a credit line increase if you are a regular customer who pays their bills on time. You should check your card policy before asking for an increase. Some cards will make a hard inquiry into your credit report, which could temporarily lower the score.
4. Secured credit cards can help you build your credit more quickly.
If you are a new credit user, a secured credit card can help establish your credit history and give you a quick boost. Secured cards often offer a lower credit limit and a refundable security bond in exchange. After a period of responsible use, you can often trade in your secured card for an unsecured one.
5. Credit agencies offer a variety of free services and tools.
You can establish your credit using many free resources, such as websites that help you obtain free copies of credit reports from Equifax, Experian, and TransUnion. You can also use credit agency services to dispute inaccurate information and get your scores repaired.
6. Cleaning up your credit report can help you remove errors or late payments.
No one can deny that mistakes on a credit report are a major detriment to obtaining a good score. Unfortunately, they often go unnoticed. That's why it's so important to regularly check your credit reports for errors and file disputes to have them corrected.
Taking steps to resolve any errors or missing information on your credit report can have an immediate positive impact on your credit. Depending upon the number of mistakes and your credit profile, disputing them can be a fast way to increase your score.