You may not make great credit overnight, but there are some strategies you can use to create credit relatively quickly. The fastest way to build credit is to be intentional about accessing each credit account, focusing on creating a positive payment history and avoiding harmful credit mistakes.
A brief background on how credit rating works
If you are just starting to build a loan from scratch, it will take at least six months before you get a credit score.
The credit scoring algorithm requires you to have at least one account active for at least six months before it can generate a credit score for you.
Your credit score is based on your credit report information. It’s the kind of grade that shows how well you went through credit. Without any information about your credit report, no credit score can be generated for you.
When you have an account opened for at least six months, then your credit score can be generated. Credit scores are calculated based on your payment history, amount of debt, the amount of time you have had credit experience, the types of accounts you have experienced, and the number of recent credit applications you have made.
Before you start making credit
Any negative information about your credit report can make it difficult to build your credit. For example, if you have an old collection of debt or other unpaid bills that are detrimental to your grade, it is best to keep these in mind before attempting to improve your credit score.
Your right to an accurate credit report allows you to dispute credit bureau errors. If you notice errors, you can write to credit bureaus and ask them to remove incorrect items from your credit report.
If you have proof of error, please send a copy to support your claim. (Keep the original for your records).
The fastest ways to build a loan
After contacting a negative account in your credit account, if you have one, the next step is to start adding positive information.
Become an Authorized User on someone’s credit card. Being an authorized user means you have the ability to use a person’s credit card, but not the responsibility of making payments. Once you are an authorized user, the entire account history is added to your credit report and credited to your credit score. If you are added to someone’s credit card, ideally it should be the account of a friend or family member with a small balance and no history of delay.
Get a secured credit card or two with a higher credit line if you can afford it. A secured credit card is easier to get if you are able to control the credit limit on a secured credit card by paying a higher deposit. Liability for higher credit limits will help you increase your credit score and allow you to qualify for unsecured credit cards with high credit limits.
Make sure you pay on time every month. When you have your own accounts, paying time is the best thing you can do to make a good credit score.
Payment history is the biggest factor affecting your credit score. The more you pay on time, the better. On the plus side, you only have to make a minimum payment payment to be considered in a timely manner, so every month you strive to pay at least the minimum due date.
Keep your credit card balance. The second biggest factor affecting your credit score is the amount of debt you carry. Keeping your credit card below the 30 percent credit limit is ideal for lending.