Seven strategies to build your credit faster

If you have a higher credit score, companies are more likely to lend you money, give you a credit card, or even offer you a job. No wonder everyone wants a better one.

Building a better credit score doesn't happen overnight, but there are actions you can take to reach your goals sooner.

If you're starting with no credit history, it generally takes about six months of consistent credit activity to establish a FICO® credit score. Getting a higher, more desirable score will take much longer.

If you have bad credit or no credit, improving your score as quickly as you can is important. People with low credit scores are often denied credit, charged higher interest rates, or even turned down for rental agreements. A good credit score signals to lenders how good you are at managing your finances and how risky it might be to loan you money.

Here are seven strategies to help you build your credit faster.

1. Learn how credit scoring works

Building a better credit score starts with understanding what makes a score go up and down. Your credit score is based on the information in your credit report, including your payment history, the amount of debt you owe, how long you’ve been using credit, new or recent credit, and the types of credit you're using.

Once you know about what makes up your credit score, you can make changes in your money habits that might impact these factors.

2. Pay off debt

If you owe money, focus on paying it off as soon as possible. Keeping your debt levels low shows lenders you're financially responsible and capable of managing your money well. Paying down your debts and increasing your credit limits will help you improve your credit score. That’s because your outstanding balances compared to your available credit accounts for 30% of your FICO score.

Paying more than the minimum due each month will help you pay off credit cards and other debts faster. Large regular payments establish a steady credit history, quickly reduce your balances, and can lower your debt-to-income ratio.

3. Get a secured card

If you don’t qualify for a traditional credit card, consider a secured credit card. It works just like a traditional credit card but is secured by a cash deposit made to the bank. Your deposit serves as collateral if payments are not made. Just like a traditional card, you swipe it when making purchases and pay off your balance at the end of the month to avoid accruing interest.

If you don’t make your payments, the bank has the right to take your collateral to recover their losses. But if you demonstrate good credit card management for a sustained period, your bank may return your deposit and increase your credit spending limit. A secured credit card can help you build credit even if you’re starting from scratch.

4. Report your regular payments

You're probably already making regular payments – rent, utilities, cell phone payments – that could help your credit score. Rent-reporting services report bills you're already paying to the credit bureaus. The cost will depend on the service; some are free and some charge a fee.

Some credit scores consider payments like these, and that may be enough for you to qualify for a loan or other credit. Before you use a rent-reporting service, know which credit bureaus will consider your regular payments and which credit scores take those payments into account.

5. Become an authorized user

Becoming an authorized user on someone else's credit card is another way to build credit. How does it work? You get a card linked to a primary cardholder’s account and you can make purchases on that card. The primary cardholder is responsible for paying the bill.

This strategy comes with risks, because good or bad, the cardholder's money habits can impact your credit score. Make sure you trust the person and have open communication about expectations. Because authorized users are usually trusted friends and family members, a missed payment or other issues can cause tension and even damage important relationships. Don’t forget that the financial risk for primary users is steep because they're legally responsible for paying off any credit card balances.

6. Ask for a credit limit increase

After several months of on-time payments, your credit card company may offer you a higher credit limit. If not, consider asking the credit card company or other creditor for a credit limit increase. Remember, a third of your credit score is based on how much you owe compared to your available credit. Paying off debt as quickly as possible while also raising your credit limit will quickly impact your score.

You can request an increase online or in-app or call the company. Be prepared to explain why you’re asking for more credit and to provide information on your income and housing expenses.

7. Dispute errors in your credit report

Know and monitor your credit score. By law, every consumer can request a free credit report every 12 months from the major credit bureaus through AnnualCreditReport.com. Also, many banks and credit card companies will provide their customers’ credit scores for free.

When you get your credit report, make sure everything is correct because mistakes can lower your credit score. If you find any inaccuracies or other issues, work with the credit bureau to address and correct them.

The journey to a better credit score

No matter where you are on your credit-building journey, keep going. Every payment made on time, every dollar of debt paid off, and every error corrected on your credit report brings you closer to your financial goals.

Building a good credit score takes time, patience, and consistent good habits. But the rewards of a good credit score are worth the effort.

Snap Finance

If less-than-perfect credit is keeping you from getting what you need now, Snap Finance can help. Snap offers lease-to-own financing for all credit types.(1)

Learn how Snap can help you shop now and pay later.

The advertised service is a lease-to-own agreement provided by Snap RTO LLC. Lease-to-own financing is not available to residents of Minnesota, New Jersey and Wisconsin.

(1) Not all applicants are approved. While no credit history is required, Snap obtains information from consumer reporting agencies in connection with submitted applications, and your score with those agencies may be affected.