Many people struggle to build up credit fast. This is particularly true if their credit history or credit rating are poor. The process can be frustrating and time consuming, but it is also essential for your financial future. A good credit score is important for many financial objectives, such as renting an apartment, purchasing a car, getting a loan, or even getting a mobile phone contract.
It takes time to build credit, but you can accelerate the process with some smart tactics. Here are the best ways to improve your credit score and build credit quickly:
1. Make all payments on time.
Your credit score is affected by more than just convenience. Your credit score can be negatively affected for years if you pay late.
2. Avoid high balances on your credit cards.
Keep your credit utilization rate as low as you can. This is the percentage that you are using of your available credit on revolving credit accounts such as credit cards or lines of credit. A credit utilization ratio over 30% can affect your credit rating.
3. Request a higher limit on your credit card.
You may be able to get a higher credit line if you're a loyal customer and have been consistently paying your bills on time. Be sure to check your card's policy before requesting an increase, though, as some card issuers will perform a hard inquiry on your credit report that can temporarily lower your credit score.
4. Secured credit cards can help you build your credit more quickly.
A secured card is a great way to establish credit quickly and build a good payment history if you are new to credit. 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. Use the tools and services that credit agencies provide for free.
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 the services of credit agencies to dispute inaccurate data and have your scores corrected.
6. Credit report cleaning is a great way to fix errors and late payments.
It is no secret that errors on your credit reports can negatively impact your score. However, it's very easy for these mistakes to be overlooked and not disclosed. It's important to check your credit report regularly for errors, and to file disputes in order to correct them.
The immediate impact of correcting any errors in your credit report or missing information can be positive. If you are able to resolve the errors quickly, your credit score can improve by as much as 100 points.