Building Credit Fast – Learn How To Boost Your Credit Score In No Time
If you are in a hurry to apply for a new loan, a poor credit rating can sadly lower your chances of approval. Especially when it comes to loans with long-term interest like mortgages and car loans, you’ll want to get approved quickly and get the most convenient interest rates.
Well, building credit fast can help you with that if you can boost your score within a few months. How can you generate positive credit history and a high score fast, you might wonder? There’s no secret formula, but luckily there are some tips you can use to build your credit in the shortest period possible. Let’s get into it to save you some time, so you can invest it in building your credit history!
- It takes 2 to 3 months to see the first updates in your credit scores, and about 6 months to build up a decent credit history with the right approach
- Credit monitoring services can help you keep track of your credit reports and credit scores, as well as dispute negative information
- Some of the fastest ways of building up your credit scores include clearing your existing debt, making on-time payments, and extending your credit limit
- The avalanche and debt snowball methods help you create debt repayment plans and strategically clear your debt to get a fast boost for your credit scores and credit history
How Fast Can You Build Your Credit?
There’s a common misconception among consumers when it comes to the matter of building credit fast.
You’ll often bump into some shady credit repair companies that offer to boost your credit within 30 days or so.
The logical question arises – how fast can you truly raise your credit score?
The answer is – it all depends on the types of delinquent items in your credit reports. It’s generally much easier to boost a poor credit score by 100 FICO points than to boost a very good score for the same amount.
However, it generally takes at least 2 or 3 months to see the first increase in your credit rating from the moment you apply these tactics to fix your score.
The reason is quite simple – creditors and financial institutions report the information to credit bureaus, which then include the information in your report.
For instance, if you are paying bills monthly, this information will be reported to credit bureaus within 30 or even sometimes 45 days. So, even if you pay off your existing debt, it will only show on your report once the bureaus receive information from the creditor.
Credit card reports are mostly updated once a month, so it gets difficult to generate a positive payment history within just 30 days.
Still, there’s one good thing for you if a poor score prevents you from applying for new credit. As mentioned, you can generate an increase of 100 points much easier than those that wish to raise their score from FICO 750 to FICO 850.
Chances are that you can’t apply for a loan due to delinquent accounts and late payments. So, we’ll deal with some steps you can take to build up your credit fairly fast.
Maybe you won’t be able to qualify for the desired loan or credit card within 30 days, but the steps you take within those 30 days and the next few months can be realized as soon as within the next 3 to 6 months.
Consider Credit Monitoring Services
To build your credit fast, you first need to know what’s in your credit report. The major credit reporting bureaus each have their own report, so you should obtain a copy from Experian, TransUnion, and Equifax.
You can claim one free copy of each credit report per year, so it’s a good place to start. Still, if you wish to see the results show up fast and within just a few months, you’ll need more than that.
That’s why it’s perhaps best if you signed up for a credit monitoring service. These services are provided by agencies like Credit Karma and other financial companies that work with the three credit bureaus.
They will track all of your reports, and inform you about any changes that might occur.
It’s important that you only trust renowned agencies, and some of them even offer free credit monitoring. Here’s a list of services that a credit monitoring agency can do for you:
- Provide monthly updates of items in your credit reports
- Enable you to check your credit score
- Report suspicious information listed in your report
- Protect you from identity fraud with ID monitoring
- Helps you dispute negative information from the report
These services are useful since they also let you get free credit scores that would be difficult to obtain otherwise. You can get one credit report per year from each of the three major credit bureaus, but it doesn’t mean your credit score will be included.
The easiest way of checking your FICO score is through your bank or credit card issuer, but it can be much more convenient to rely on the services of a credit monitoring agency.
This way you’ll receive constant updates of your score, and the items that show up in your report. It’s a great way to start building your score fast.
Use The Information From Credit Reports To Build Up Your Score
There’s no better way of building up your credit scores than knowing what brought them down in the first place. You can use the information obtained from the credit report to boost your credit score fairly quickly.
Most importantly, you’ll see any missed payments so you can repay the debt and hopefully get them removed from your report. However, you should be careful since payments that you’ve been late on for more than 30 days can stay on your report for up to 7 years.
Also, you might even be able to file a credit dispute yourself, or a credit monitoring service can help you with that. Of course, this isn’t something you should hope for, but errors happen more than you would think with credit reports.
Maybe there’s been an unauthorized hard credit check, or the creditor didn’t report to the bureau that you’ve repaid your debt. These things are always worth checking out, and a credit monitoring company can help you deal with these disputes.
If an item gets removed from your credit report, you can expect to see the changes in your credit score within 30 days.
The Fastest Ways Of Boosting Your Credit Score
There are five important factors that you’ll have to deal with when fixing your credit score.
Two of the most influential ones are the credit utilization ratio and your payment history. According to Experian’s research, you’ll need a credit utilization rate below 30% for a good credit score.
Your credit utilization ratio depends on the total revolving balance you are using when compared to your total credit limit.
So, if you’ve been using more than 30% of your revolving balance, reducing your overall credit limit utilization can quickly boost your score.
On the other hand, your payment history can’t be corrected if you have delinquent payments already reported on your credit report.
What you can do is start making on-time payments and turn the tables around.
Other factors that contribute to your credit score include your credit mix, length of your credit history, and new credit applications.
So, here are some of the fastest ways to influence these factors and improve your credit as soon as possible:
Deal With Your Monthly Payments Strategically
Getting out of debt is the foundation of every good credit score, and there’s no way you can boost your score faster.
Here are some tips for making on-time payments starting from this month, so you can expect to see the changes in your report within the next month or two:
- Pay off your high-interest loans first
- Repay missed payments within 30 days from the due date
- Negotiate new loan terms with your lenders
- Always pay utility bills on time
You’ll have to set a priority when getting out of debt, so sorting out your high-interest loans first can be a wise move in the long run. You’ll be left with more funds to repay low-interest loans and monthly bills.
If you happened to live through a financial crisis recently, or your medical bills prevented you from repaying the loan, you can try re-negotiating with your lender.
You can’t make much of a difference in terms of the amount you have to pay, but you might be able to extend your loan and get a lower interest rate per month.
You’ll still be paying the same amount long-term, but at least you’ll get that small financial boost to deal with your bills and other payments. Also, always try to make several smaller payments instead of paying your credit balance at the end of the month altogether.
This can be a smart move since more payments will be reported and it can start to influence your payment and credit history within months.
The most important thing is – don’t miss a single payment ever again. Late or missed payments can stick on your report for up to 7 years, which damages your score and creditworthiness.
Ask Someone You Know To Add You As An Authorized Card User
If you have a family member or a friend with a good credit score and a credit account with low utilization, you can benefit from their record. Ask them to list you as an authorized user, and the history of their account will be added to your credit report.
It’s one of the most useful “tricks” of getting your credit score boosted fast. You can improve your credit even if you have a bad credit score this way. It isn’t necessary to make any purchases with the user’s credit card.
It’s enough to make sure that their card furnisher reports to all three credit bureaus. By doing so, you’ll see a quick change on your credit reports, and it will impact your credit scores. You can expect to see your credit boosted as soon as the creditor reports back to the bureaus.
I should also note that this could go the other way. If the person starts making late payments or utilizing too much of their credit mix then that may negatively impact your own credit score.
Remove Collections From Your Report
One of the things that can prevent you from boosting your credit score is a collection account reported on your credit reports. It also serves as a sign to creditors that you’ve been so late with the payment that the debt got sold to collection agencies.
To deal with these, you’ll have to repay the debt and get in contact with the collection agency instead of your creditor. The only way to remove them is to have a collection agency stop reporting the debt to credit reporting agencies.
Sometimes, you might even be able to make an arrangement with the collection companies by presenting your repayment plan and doing a “pay for delete” negotiation.
Either way, you can’t escape paying for the debt, and as soon as you repay it, the sooner your credit score will jump.
Extend Your Credit Limits
If you can utilize the previous tips and prevent yourself from having high credit card balances, you might be able to get a credit limit increase. It can boost your credit score fast by affecting your credit utilization ratio.
As we discussed, keeping your credit card balances low reduces your revolving credit usage. This demonstrates positive financial habits to creditors and improves your credit score if you keep the utilization well below 30%.
This is one of the fastest ways of boosting your score since the credit utilization ratio affects your overall credit score by 30%. The best thing is – you can see the initial results quite fast, right after the credit card company reports the increased limit to the bureaus.
Make sure that the credit card companies report to all three bureaus, and reach out to ask for the increase. One thing to watch out for is to ask about the possibility of this inquiry not affecting your credit reports as a hard check.
Once these conditions are met, and you’ve proven yourself to the creditor with timely recent payments, you can expect to get the credit limit increase granted. Make sure to keep the balance on your credit card account the same as it was before the increase if you wish to instantly build up your credit.
Consider Getting A Credit Builder Loan
As you are looking to build up your credit, a credit builder loan might seem like a logical step to take. However, there are some limits to these types of loans – high-interest rates and potential hard credit checks.
So, don’t just go rushing after these offers, take your time and browse your options.
If you need a way to improve your payment history, taking a credit builder loan with the lowest interest possible and without a hard pull of your credit report can be a good strategic move.
Credit builder loans aren’t like regular personal loans. With these, you’ll be paying the creditor monthly to get your funds deposited in a savings account. Of course, you can access the funds in the end, or even choose to leave them there.
The account will be in your name, and you’ll just end up paying interest and get positive payment history in return.
One thing to keep in mind with these options is to always create a financial plan to manage your payments on time. If you miss a single payment, credit builder loans won’t make any sense and you’ll just end up hurting your score.
Set Up Automatic Payments For Your Bills
While this might sound a bit obvious, the fastest way to proceed to build your credit after sorting all of your debt on credit accounts is by timely payments.
This mostly refers to your bill payments, and one of the easiest ways of managing those is by setting automatic payments.
Your credit scores drop with each missed payment, and paying bills on time should be the foundation of good credit.
So, you can use your baking app to schedule automated payments, and the amounts meant for bill payments will be deducted from your balance every month.
Consider Financial Tactics For Debt Repayment
Here’s some sound advice – you can use one of the debt repayment methods recommended by financial experts to both clear your debt and boost your credit score altogether. There are two methods for getting rid of any existing debt as recommended by financial experts:
- The avalanche method – this method includes making the biggest payments for high-interest debt first. This way, you can clear the debt with the highest interest paid first, and move on to the second-biggest debt afterward.
You’ll progressively eliminate the debt which takes the most money out of your pocket on monthly interest. What’s more, you can build a financial plan to still make at least small payments to lower-interest accounts, to sort out credit card debt.
2. The debt snowball method – using this technique, you’ll be making the smallest debt repayments first. In other words, you can repay debt with the lowest interest paid, and build your way up to payments with the highest interest.
While this method leaves the biggest payment for the end, it eliminates most of your small debt along the way which quickly reflects your credit scores.
Balancing between the credit accounts is crucial to building up your score fast, so these options can come in quite handy. You can customize them and make your own financial plan according to your debt and the preferred repayment method.
In the end, while you can build your credit fast, it will probably still take a bit of time. However, this guide will help you make your way through the items and accounts that can impact your credit score.
By keeping the usage of your revolving credit low, and making on-time payments, you can quickly see the difference on your credit report, and in your credit scores.
The key factor in building up your credit as fast as possible is to also make sure not to miss a single payment in the process since it can turn all your efforts into waste.
Frequently Asked Questions (FAQ):
How fast can I build up my credit?
You can build up your credit scores within several months with the right approach, while it takes up to 6 months on average to upgrade your score by 100 points or even more.
It all depends on how fast you get out of existing debt, and how you manage on-time payments after that.
What builds credit the fastest?
Sorting out any late payments and paying your bills on time along with lower credit utilization builds your credit the fastest.
History of payments and credit utilization influence your credit scores the most, so these two factors are those you’ll want to deal with first when trying to build up credit fast.
How can I raise my credit scores to FICO 700 fast?
You can raise your credit to FICO 700 fast by keeping your credit balances low, having a diverse credit mix and making timely payments.
Also, you should try credit monitoring to clear your report from any potential disputable information.
It could take 6 months or more to build up your credit to FICO 700 if you had a bad score previously, but it’s worth it since 700 is close to the
all-time high average US credit score
as measured by Experian.
Rory AckermanHi, I'm Rory! I've worked in the banking industry for quite some time and wanted to help provide my expertise with all things credit related. In my spare time I like to play video games and collect sports cards.
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