fastest ways to build credit

One of the most important- and possibly confusing- things about adult life is making sure that you are keeping up with your credit score.  You may have run into some traps that landed you with bad credit (or no credit history) when you were younger that you’d like to fix. 

The big question is how? Many people don’t exactly understand how credit works let alone the ways that they can increase their scores. But you don’t have to stay stuck in this cycle. Keep reading if you want to find out some to the fastest ways to build credit. 

1. Open Helpful Credit Lines

Here’s the thing- some people have a history of poor credit and others have almost no credit history. Both of these situations can create issues because they don’t show proof of how responsible you can be with borrowing money and paying bills. The basic concept that credit scores are built on is practicing financial discipline. 

Opening up helpful credit lines, such as credit cards for repairing and store cards, is one of the fastest ways to build credit. But it’s not just about being approved and spending the money. You still have to make sure you treat the cards responsibly. 

Eventually, your credit line will increase after you’ve proved that you handle borrowing and managing larger amounts.

2. Make Payments On-time

Skipping out on making payments on time can greatly damage your score. The best thing you can do when borrowing is to make sure you stay on top of when every single bill is due. Even being a day late can show negative reporting marks depending on the company.

Take some time to write down the payment due dates on all of your bills and check them frequently. Making sure you are on top of giving back money you borrowed is another one of the fastest ways to build credit so keep your calendar close.

3. Deal With Collection Accounts

Just a few years ago studies showed that over 77 million people reported being in collections. This means that they didn’t pay the original owners of the money that they borrowed so their accounts were sold to companies who operate solely to collect delinquent debts. 

Dealing with collection agencies can be exhausting, intimidating and overwhelming. But it’s necessary to put you on the road to better credit. There are ways of handling debt collectors so no need to worry if you’ve been dodging tons of calls.

Get a copy of your credit report and find the number to the collection agencies. One of the options you have is to call them and arrange a settlement amount or payment plan you can afford. The other thing you could do is contact the original lender and try to work out a deal with them.

In either situation, you want to make sure that the account will be removed from your report (get this in writing). Also keep in mind that most accounts are automatically deleted after 7 years from the last date of contact. However, you may still owe the debt so be sure to check.

4. Pay Bills In Full

Although most companies will give you the option of paying the minimum amount due, one of the fastest ways to build credit is to pay bills in full. This goes back to keeping tabs on your due dates, as well as the accurate amounts that you owe.

Try sticking to spending amounts that you would be able to replace right away. In other words, it’s not the best habit to use what you don’t have unless it’s an emergency. Put back exactly what you take and watch your credit score start to skyrocket!

5. Stay Under Credit Limit

Again, aside from emergencies, it’s best to keep your spending well under the credit limit. Do your best to use below 30% of the line amount. This is recognized as credit utilization and does have a significant impact on your score.

The whole idea around borrowing money from lenders isn’t to spend every penny. It’s to help out with things that you already have to pay for. If you keep this in mind then it may help you avoiding overspending.

Practice habits that keep you under the limit cutoff, such as leaving your card home or making small payments throughout the month.

6. Keep Debt Low

Often times when you want to purchase a new home or vehicle they check your credit report. One of the factors that they consider is your debt-to-income ratio. This basically shows how much money you owe in comparison to the amount of income you currently bring in.

Keeping debt low can help with boosting your credit score. It also feels good to know that you don’t have to front large bills for paying back money on a monthly basis. 

Work on only borrowing money for necessities (house, car, business, etc.) and paying back the loan as quickly as possible. 

7. Dispute Inaccuracies 

Sometimes errors end up on our credit reports that slip through the cracks and can drastically impact our scores. Another one of the fastest ways to build credit is to dispute any inaccuracies in your history.

If your identity has been stolen or you just don’t remember making a certain purchase, contact the credit bureaus immediately to contest the false information. You can prevent these types of situations from occurring frequently by signing up for an identity theft protection service that monitors credit reportings. 

Ready to Apply the Fastest Ways to Build Credit to Boost Your Score?

The sooner you start applying these tips for the fastest ways to build credit the better. Waiting too long to fix past due accounts and incorrect items on your report can dig you into a deeper hole.

It’s important that you remember it’s possible for you to have a high credit score if you just take one step at a time and remain consistent with repairing. If you’re looking for an opportunity to help enhance your credit score, feel free to contact us today!