Building credit quickly is possible with some strategic planning and discipline. While it typically takes years to build a strong credit profile, there are techniques you can use to accelerate the process. With focus and commitment, you can establish creditworthiness much faster than average.
Start with secured credit cards
One of the fastest ways to build credit from scratch is to get a secured credit card. With a secured card, you provide a cash deposit as collateral that acts as your credit limit. The card issuer reports your payment activity to the credit bureaus, helping you establish a credit history.
The key advantages of secured cards for fast credit building are:
- They are easier to qualify for than traditional credit cards because your deposit secures the lender’s risk.
- Most report your payment history to all three major credit bureaus (Experian, Equifax, and TransUnion).
- They allow you to demonstrate responsible credit use, which factors heavily in your score.
To maximize your secured card for fast credit improvement:
- Apply for one that reports to all three bureaus.
- Keep your credit utilization low by limiting charges to 30% or less of your limit.
- Pay your balance in full and on time every month.
- Avoid extra fees and interest charges.
In as little as 6 months of prudent use, a secured card can help boost your credit score significantly. Just make sure to choose your secured card issuer carefully and use the card responsibly.
Become an authorized user
Becoming an authorized user on someone else’s credit card can also help you build credit quickly. As an authorized user, the primary cardholder’s account history gets added to your credit reports, even though you aren’t financially responsible for the account.
The major benefits of authorized user status for fast credit building include:
- Instantly adding a long credit history to your reports.
- Increasing your credit mix by adding a revolving credit account.
- Boosting your overall credit utilization ratio.
To leverage authorized user status most effectively:
- Get added to an account with a long, positive history.
- Try to be reported on the account to all three credit bureaus.
- Make sure the primary user keeps balances low.
- Avoid getting added to accounts with negative marks if possible.
With authorized user tradelines from responsible credit users, you can accumulate years of positive history without waiting. This can dramatically accelerate your credit building, especially if you have no prior credit accounts.
Apply for credit builder loans
Credit builder loans allow you to build credit while paying off a loan in installments. The lender places the full loan amount in a savings account while you make monthly payments. Once you repay the loan, you receive the money that was deposited upfront.
Credit builder loans help fast-track credit improvement because:
- They don’t require a credit check or down payment.
- All payments are reported to credit bureaus.
- Interest rates are typically lower than credit cards.
- They establish a history of on-time installment loan payments.
To maximize credit builder loans:
- Shop for low origination fees and interest rates.
- Apply for a loan amount you can afford to pay off consistently.
- Autopay your monthly payments so you never miss one.
- Pay off the full loan term to get the savings deposit back.
In addition to credit builder loans, secured cards and authorized user status, there are several other tactics you can use to build credit quickly and boost your credit scores.
Other fast credit building strategies
Add your rent payments
Paying rent on time every month demonstrates responsible financial behavior. However, traditional rent payments don’t get reported to the credit bureaus. Reporting your on-time rent can quickly add positive payment history and improve your credit profile and scores.
You can report rent payments to all three credit bureaus by using third-party companies like RentTrack. RentTrack reports your rental payment history to the credit bureaus when your landlord confirms on-time payments. It’s a simple, fast way to build your credit with information most landlords already have documented.
Dispute credit report errors
Incorrect negative information on your credit reports can unfairly lower your credit scores. If you spot any errors or outdated information, file disputes with the credit bureaus to get the items removed. Successful disputes can sometimes boost your scores quickly since negative items drag down your profile.
Monitor all three of your credit reports frequently to check for inaccuracies or outdated information. Dispute errors with the relevant credit bureau online, by mail, or over the phone. Provide as much supporting documentation as possible to improve your chances of successful disputes. Under the Fair Credit Reporting Act, bureaus must investigate and remove any items they cannot verify as accurate.
Limit credit inquiries
Every application for new credit initially causes a small dent in your credit scores. Too many credit inquiries in a short period can lower your scores more significantly. Limit credit checks by only applying for accounts you need and space out your applications over several months. Also, comparison shop for loans and credit cards within a focused time period. The credit bureaus count multiple inquiries in a short window as a single inquiry.
Ask for credit limit increases
Higher credit limits with low balances help lower your credit utilization and improve your scores. Periodically ask your creditors to increase your limits on accounts with on-time payment histories. Keep total balances below 30% of new higher limits to maintain low utilization. Just be careful not to overspend with increased available credit.
Become a checking account authorized user
Similar to credit cards, you can get added as an authorized user on someone else’s checking account. Banks report checking account histories to specialty consumer reporting agencies like ChexSystems. Having a positive checking account history can help you qualify for new accounts down the road. So adding yourself to a responsible user’s established account can build your profile with checking account agencies as well.
How fast can you realistically build credit?
On average, it takes between 6 months and a year of smart credit management to build good credit scores from no prior history. However, your exact pace depends on your specific actions and credit situation. Factors that influence how fast you can build credit include:
- The number of new accounts opened.
- Size of credit limits established.
- Types of credit accounts added.
- Amount of positive history accumulated.
- Any negative items present.
- The exact scoring model used.
With optimal credit-building strategies, dedication, and some luck, you could potentially go from no credit to a 700 score within 6 to 12 months. While challenging, it is possible with the right techniques.
More realistically, expect your credit journey to take between 12 and 24 months to reach good credit ranges if you have no experience. Building credit takes patience, but you can reach your goals much faster by understanding the best practices and staying persistent.
Tips for speeding up credit building
Here are some additional tips to accelerate your credit building efforts:
- Check credit reports and scores frequently – At least every 3-4 months. Watch for issues and track your progress.
- Mix credit types – Open installment loans and revolving accounts to show credit diversity.
- Keep old accounts open – Having long credit histories improves your profile’s age.
- Live below your means – Don’t overspend just because you have more available credit.
- Pay down balances monthly – High utilization drags down credit scores.
- Enroll in credit monitoring – Third-party monitoring can alert you to score changes.
- Practice good habits – Responsible habits like paying bills on time build creditworthiness.
- Be patient – Building excellent credit takes time. Don’t get discouraged.
Maintaining strong credit
Reaching great credit scores is just the first step. Maintaining great credit over the long-term is equally important, if not more so. Some tips for preserving your stellar credit after building it include:
- Not closing your oldest accounts
- Asking for periodic credit line increases
- Balancing credit types – installment, revolving, mortgage
- Charging a small amount monthly and paying in full
- Disputing errors and outdated information quickly
- Checking your credit reports and scores every 4-6 months
- Being cautious with inquiries by spacing out applications
By continuing the same smart habits that helped build your credit profile, you can enjoy low interest rates and ideal approvals for years to come. Monitor your activity, keep debt low, and your hard work establishing great credit will pay off over the long run.
Conclusion
Building credit quickly takes diligence, patience, and using the right credit-boosting products and strategies. Secured cards, authorized user status, credit builder loans, and reporting rent payments can all accelerate your credit journey. On average, allow 12 to 24 months to reach great credit, with 6 to 12 months possible in some cases. Most importantly, forming and sticking to responsible financial habits will lay the foundation for strong credit far into the future.