How to build credit fast

• Building credit fast: Paying bills on time and keeping credit utilization low are two fast ways to build credit.
• Secured credit: Using secured credit cards or becoming an authorized user can help establish credit fast, especially if you’re just getting started.
• Keep a credit mix: Having different types of credit, like credit cards and installment loans, can strengthen your credit profile.

Building credit is often misunderstood and some may even think of using credit as being always bad. But if you’ve been relying on cash and now want to make a big purchase, like putting a down payment on a home, lenders won’t have much to go on to gauge their risk. In this guide, we’ll suggest easy ways to build your credit fast, even if you’re just getting started.

There are many ways to build credit fast, and the best actions for you will depend on your situation and financial goals. Here are some suggestions to consider — you can choose the ones that best fit your circumstances. Each option may affect your score differently, and some may work faster than others.

Here’s a table with a brief overview of each step, and how quickly you might be able to see results:

Getting into the habit of paying your bills on time is one of the fastest ways to build credit. It’s also key for your financial health as a whole. In fact, on-time payments account for around 35% of your credit score (under the common FICO scoring method), so you can usually see improvements fast from this one habit shift.

Remember, every time you swipe your credit card, you’re essentially borrowing money from the bank or card issuer. If you carry a balance or miss payments, you’ll easily rack up interest and debt. This behavior can harm your credit over time.

To make sure you never miss a payment, consider setting up autopay from your checking account. Most credit card companies offer this feature. Alternatively, you can add due dates to your calendar. By setting recurring reminders, you’ll always know when it’s time to pay.

Your credit utilization ratio is the percentage of credit you’re using compared to your total available credit. Lenders prefer to see a low ratio because it signals responsible credit use. Regularly getting close to your credit limit can make you seem like a higher-risk borrower.

Many experts recommend keeping your credit utilization below 30%. If you’re aiming for an excellent score, this could mean staying under 10%. This means that with a $50,000 credit limit, you would want to spend less than $5,000 a month before paying it off.

Here are a few ways to keep your credit utilization under control:

• Try to keep your credit card spending limited to small monthly bills.
• Look for ways to cut your monthly expenses or save money.
• Consider asking your card issuer to raise your limit, especially if you have a good payment history. 
• Getting multiple credit cards can increase your total available credit and is often suggested as a way to build credit fast. However, it’s worth making sure you can manage payments on one card before taking on more debt.

Once you’ve taken the first few steps to building your credit, you might start to see the early progress. You can check this by reviewing your credit report. While it’s typically recommended to check your credit at least once a year, doing it quarterly – or even monthly – gives you a better chance of catching any errors or signs of fraud early.

You’re entitled to a free credit report every year from each of the three major credit bureaus: Equifax, Experian, and TransUnion. You can also check your report weekly at no cost through AnnualCreditReport.com.

Did you know that nearly half of all credit reports have mistakes?¹ Not all errors are damaging, but others can unfairly drag down your score. Disputing these mistakes is one way to help boost your credit fast.

Once you have your credit report, go through it carefully. Look for issues like bill payments marked late when you paid on time, or incorrect credit limits. If you spot an error, gather any proof, such as bills or letters from your lenders, and dispute it with the credit bureaus. The fastest way to do this is usually online.

Fixing a mistake on your report is one way to improve your credit score fast. Disputes usually take 30 to 45 days, but it can be worth doing this before applying for an important loan.

You can also build credit fast by becoming an authorized user on the credit card of someone with a strong credit history. It could be a parent, family member, or close friend — basically, anyone with good credit who’s willing to add you to their account. You’ll benefit from their positive payment history as if it were your own.

Before you go ahead, make sure you meet the card issuer’s age requirements. Also, not all credit card companies report authorized users to credit bureaus, so double-check this to make sure it’ll actually help to improve your score.

Even if you might prefer to avoid them, it’s hard to establish a credit history without a credit card. Secured credit cards tend to have more lenient approval requirements, so they are especially helpful if you’re a beginner and unsure how to build credit fast.

Here’s how you can use a secured credit card:

1. To open a secured card, you’ll need to put down a refundable cash deposit. This deposit usually starts at $200 and is used to set your credit limit.
2. Make small, regular purchases — like groceries or utility bills — and be sure to pay off the balance in full every month.
3. As you consistently pay off your balance, your credit score will start to improve. Over time, you may qualify for an unsecured card with better benefits.
4. Be careful not to apply for too many cards at once. Multiple inquiries at the same time can negatively affect your credit score.

If you need time to save up for the security deposit, consider opening a high-yield savings account to grow your money faster.

Credit bureaus like to see that you can handle different types of credit. A good credit mix might include revolving credit (like credit cards) and installment loans (like auto loans or mortgages). Having both on your report shows that various lenders trust you to pay off debts, and can help you to build credit fast.

Your credit mix may only make up 10% of your FICO score, but it can still help boost your score over time. What’s more, making regular payments on personal loans strengthens your payment history, which of course plays a bigger role in your score.

It’s always worth thinking about what counts as a “good” credit mix, as this can vary by lender. And while a variety of different types of credit can be beneficial, taking on debt just for the sake of it isn’t always the best move. Sometimes, saving up to buy something outright can be a better option than borrowing money.

Did you know that adding utility and phone payments to your credit report can help strengthen your credit score? If you’re good at paying these bills on time, this could be something worth considering. Credit card payments will always be the main focus of credit reports. But utility bills like rent, electricity, water, gas, and phone bills can also be included.

You have two main options for doing this:

1. Ask your landlord or property manager to report your payments directly to the credit bureaus.
2. Use a third-party service that specializes in adding non-credit payments to your report.

If you are confident you have a solid history of on-time payments for these bills, this can be an effective way to build your credit profile.

Finally, no guide on how to build credit fast would be complete without credit-builder loans. A credit-builder loan is designed to help you build a positive credit history by showing that you can make regular, on-time payments.

1. Start by applying for a credit-builder loan. You can typically borrow between $300 and $1,000.
2. Once the loan is approved, the loan amount is deposited into a savings account, which you can access after repayment.
3. Pay back the loan in fixed installments over 6 to 24 months.

Because these payments are reported to the major credit bureaus, credit-builder loans can positively impact your credit score — as long as you pay on time!

The main advantage is that credit-builder loans are generally easier to qualify for, even with a low credit score. This means you have a way of demonstrating that you’re capable of borrowing money responsibly.

You could also consider other options, like a CD loan, to help boost your credit score.

Building credit doesn’t happen overnight; it’s more of a marathon than a sprint. You can find all manner of guides online showing how to improve your credit score fast. Some claim you can gain 100 points in a matter of weeks, but the reality is that developing a solid credit history takes time (and patience!).

That said, by making small positive changes, you might start seeing improvements in as little as 30 to 45 days. That’s because credit card companies typically report your balance and payment activity to the credit bureaus once a month. Even if you just start paying down your balance, you might start seeing some good results within a few months.

Whether you’re able to build credit fast also depends on where you’re starting. Are you building credit from scratch, or looking to rebuild after a setback? Experts generally say it takes about six months of consistent activity to see significant progress.

If you’re new to credit, you may notice bigger leaps in your score early on, simply because there's more room for improvement. The same goes for those starting from a lower score in the “fair” or “bad” range. However, reaching the higher echelons of the “good” or “exceptional” ranges often takes longer.

Find out more about what makes a good credit score.

If you’re starting from scratch with no credit history, a secured credit card might be a good place to begin. These cards are purposefully designed for people with no credit background, and they can help you build a credit profile over time. College students can take advantage of student credit cards, which can offer some extra perks.

Already have a checking or savings account with a bank? It might be worth checking if they offer credit cards. Existing banking relationships can often help you qualify for better interest rates.

Some credit card providers offer pre-approval tools that let you check which cards you might qualify for without affecting your credit score. This process is called a “soft pull.” Just keep in mind that, if you decide to accept an offer, it will trigger a “hard pull”, which could temporarily lower your score and show up on your credit report.

Another option often recommended for beginners is to become an authorized user on someone else’s credit card. This lets you benefit from their good credit habits.

Knowing how to build your credit is a big step toward better money management. Another key step is getting the most out of your savings by finding higher interest rates. Raisin provides a simple way to help you reach greater earning potential.

With a fast, one-time account registration, you’ll get access to a range of savings products, such as high-yield savings accounts, through our partner banks.

The above article is intended to provide generalized financial information designed to educate a broad segment of the public; it does not give personalized tax, investment, legal, or other business and professional advice. Before taking any action, you should always seek the assistance of a professional who knows your particular situation for advice on taxes, your investments, the law, or any other business and professional matters that affect you and/or your business.

Sources

¹ https://www.usatoday.com/story/money/2024/05/26/credit-report-errors-what-to-do/73816078007/