- 8 Ways to Build Credit Fast
- 2. Make frequent payments
- What's next?
- Increase your credit score during coronavirus by doing this
- The best way to increase your credit score fast
- Other ways to increase your credit score
- 1. Pay your bill on time
- 2. Keep your balances low
- 3. Keep unused accounts open
- 4. Monitor your credit
- How to manage your financial health during coronavirus
- 1. Get on a budget
- 2. Fund your emergency savings
- 4. Be wise about debt
- Protecting your credit during the coronavirus pandemic | Consumer Financial Protection Bureau
- Here are some key questions to ask:
- How do I get a copy of my credit report?
- How often should I check my credit reports after talking to my lender?
- How can I get errors in my credit report fixed?
8 Ways to Build Credit Fast
If your credit score is lower than you'd , there may be quick ways to bring it up. Depending on what's holding it down, you may be able to tack on as many as 100 points relatively quickly.
Scores in the “fair” and “bad” areas of the credit score ranges could see dramatic results — leading to more access to loans or credit cards, and at better terms.
Check your free credit score, get personalized insights. Weekly updates let you track your progress.
If you’re struggling with a low score, you’re better positioned to quickly make gains than someone with a strong credit history.
Is a 100-point increase realistic? Rod Griffin, director of public education for credit bureau Experian, says yes. “The lower a person’s score, the more ly they are to achieve a 100-point increase,” he says. “That’s simply because there is much more upside, and small changes can result in greater score increases.”
And if you’re starting from a higher score, you ly don’t need a full 100 points to make a big difference in the credit products you can get. Simply continuing to polish your credit can make life easier, giving you a better chance of qualifying for the best terms on loans or credit cards.
Here are some strategies to quickly improve or rebuild your profile:
No strategy to improve your credit will be effective if you pay late. Why? Payment history is the single biggest factor that affects credit scores, and late payments can stay on your credit reports for seven years.
If you miss a payment by 30 days or more, call the creditor immediately. Arrange to pay up if you can and ask if the creditor will consider no longer reporting the missed payment to the credit bureaus.
Even if the creditor won’t do that, it’s worth getting current on the account ASAP. Every month an account is marked delinquent hurts your score. Fortunately, the impact of a missed payment fades over time. Showing lots of positive credit behaviors after a misstep can help offset the damage more quickly and eventually improve your credit.
2. Make frequent payments
If you are able to make small payments — often called micropayments — throughout the month, that can help keep your credit card balances down and improve your credit. Making multiple payments throughout the month moves the needle on a credit score factor called credit utilization. After payment history, this is another factor that highly influences your score.
If you're able to keep your utilization low instead of letting it build toward a payment due date, it should benefit your score right away. (You can track your credit utilization on each card and overall by viewing your credit profile with NerdWallet.)
When your credit limit goes up and your balance stays the same, it instantly lowers your overall credit utilization, which can improve your credit.
Call your card issuer and ask if you can get a higher limit without a “hard” credit inquiry, which can temporarily drop your score a few points.
If your income has gone up or you've added more years of positive credit experience, you have a decent shot at getting a higher limit. Some issuers may also be willing to work with you during the COVID-19 crisis.
A mistake on one of your credit reports could be pulling down your score. Fixing it can help you quickly improve your credit.
You're currently entitled to a free report every week from each of the three major credit bureaus: Equifax, Experian and TransUnion. Use AnnualCreditReport.com to request those reports and then check them for mistakes, such as payments marked late when you paid on time or negative information that’s too old to be listed anymore.
Once you've identified them, dispute those errors to get them removed. The credit bureaus have 30 days to investigate and respond. Some companies offer to dispute errors and quickly improve your credit, but proceed with caution before you choose this option.
If you have a relative or friend with a long record of responsible credit card use and a high credit limit, consider asking if you can be added on one of those accounts as an authorized user. The account holder doesn’t have to let you use the card — or even tell you the account number — for your credit to improve.
This works best for if you have a thin credit file, and the impact can be significant. It can fatten up your credit file, give you a longer credit history and lower your credit utilization.
Another method that can be used either to build credit from scratch or improve your credit is by using a secured credit card. This type of card is backed by a cash deposit; you pay it upfront and the deposit amount is usually the same as your credit limit.
You use it a normal credit card, and your on-time payments help your credit. Choose a secured card that reports your credit activity to all three credit bureaus.
You may also consider looking into alternative credit cards that don't require a security deposit.
If you're racing to improve your credit profile, be aware that closing credit cards can make the job harder. Closing a credit card means you lose that card’s credit limit when your overall credit utilization is calculated, which can lead to a lower score. Keep the card open and use it occasionally so the issuer won’t close it.
Frequently asked questions
How fast can you raise your credit?
Someone with a low score is better positioned to quickly make gains than someone with a strong credit history. Paying bills on time and using less of your available credit limit on cards can raise your credit in as little as 30 days.
How can I raise my credit in 30 days?
Paying bills on time and paying down balances on your credit cards are the most powerful steps you can take to raise your credit. Issuers report your payment behavior to the credit bureaus every 30 days, so positive steps can help your credit quickly.
How do I get my credit score up 100 points in one month?
If you have a low score, you’re better positioned to make gains than someone with a good credit score. Depending on what's holding it down, you may be able to add as many as 100 points through positive credit habits paying on time or using less of your available credit.
You can check your progress with a free credit score and weekly updates.
- Sign up to get your free credit score and report from NerdWallet. Information is updated weekly, and the factors affecting your score are broken out to make them easier to understand.
- Learn how you can manage your credit with NerdWallet.
Increase your credit score during coronavirus by doing this
If the coronavirus pandemic has had an effect on your personal finances — if you were forced you to max out your credit limit and hurt your credit score — you are not alone. According to the Pew Research Center, the number of unemployed workers grew faster in just three months in 2020 than it did in two years during the Great Recession.
As a result, many have valid concerns about how the crisis will impact credit card debt, credit history, and other aspects of their personal finances. Each situation is different, but there is one thing that could increase your credit score if coronavirus has had an impact on your credit.
The best way to increase your credit score fast
Using credit cards can be an excellent way to build credit because, despite their relatively high-interest rates, there's a way you can use them without paying any interest at all.
If you're looking to open up a new credit card, use Credible to shop around for different cards — from secured cards to balance transfer cards — and compare card companies instantly. From redeeming rewards to building credit, Credible can help in any situation.
Each month, your card issuer reports your statement balance to national credit reporting agencies.
If you have a balance — even a small one — it shows that you’re using your available credit, which helps lenders see how you manage your debts. Pay your bill in full to avoid any interest fees.
If you have a rewards credit card, you may be able to use your points and miles or cashback to cover some of your expenses.
By visiting Credible, users can quickly compare the best rewards credit cards available.
10 CREDIT CARD TERMS EVERYONE SHOULD KNOW
Other ways to increase your credit score
Here are four more ways you can use your credit cards to boost your credit score.
- Pay your bill on time
- Keep your balances low
- Keep unused accounts open
- Monitor your credit
1. Pay your bill on time
Your payment history is the most important factor in your credit score, so paying bills on time is crucial — or at least the minimum amount due every month. If you can, pay your bill in full to avoid interest and other late payment charges. If you miss a payment, you’ll generally have 30 days from the due date to get caught up before it’s reported to card companies.
2. Keep your balances low
Your credit utilization rate — the percentage of your credit limit you’re using at a given time — is an important factor in calculating your credit score.
If you’re constantly bumping up against your credit limit, it may be a sign that you’re having a hard time managing your debts. As a result, the lower your credit utilization, the better.
If your credit utilization rate is high, consider using a consolidation loan to pay off the debt — by transferring it to a personal loan, your credit utilization rate on the card will drop to zero.
3. Keep unused accounts open
Don't close your old credit cards. These cards are helping build your credit score, even if you never use them.
That’s because your length of credit history — how long you’ve been using credit and the average age of your credit accounts — is another component of your credit score.
Just keep in mind that some card issuers may cancel your account if it remains inactive for too long. Consider making a purchase every six months or so to keep the card active.
4. Monitor your credit
Your credit report will show you which areas of your credit history need your attention, and with your credit score, you’ll be able to see where you stand and track your progress. With Experian, you can check your credit score and credit history for free.
If you’re looking for a new credit card, use an online marketplace Credible to get an idea of what’s available your credit score and preferences, and compare those options.
HOW FICO'S NEW CREDIT SCORE CHANGES WILL AFFECT YOU
You can also use Credible to compare personal loan rates and get prequalified. The online marketplace can be helpful if you’re thinking about consolidating your credit card debt to lower your credit utilization rate. Enter your loan amount and estimated credit score to find out what kind of rates you qualify for without hurting your credit.
Use Credible’s personal loan calculator to estimate your monthly payments to ensure you're choosing the best repayment term for you.
How to manage your financial health during coronavirus
Using credit cards to build and maintain a good credit score is possible for many. However, credit repair isn't the only way to improve your financial situation.
Here are three other moves to consider:
- Get on a budget
- Fund your emergency savings
- Be wise about debt
1. Get on a budget
If you’re not already using a budget, think about creating one for your household. Even the simple act of writing out where your money goes can help you understand if you can make better spending decisions. It can also help you see where you can reallocate spending to areas of your finances that can improve your situation.
2. Fund your emergency savings
Even if money is tight, you may be able to boost your personal finances by saving a little each month for a rainy day. Look for opportunities with your budget to set cash aside for financial emergencies the one caused by the pandemic.
HOW TO MANAGE CREDIT CARD BILLS DURING CORONAVIRUS
4. Be wise about debt
In some situations, it can be challenging to avoid debt, especially if you’ve lost your job or had your hours cut. However, if you need to borrow money, use an online marketplace Credible to shop around and ensure you’re getting the best deal. Also, avoid applying for credit unless you need it.
As you practice these and other smart financial habits, you may have a better chance of weathering the storm of the pandemic and coming out the other side on a more stable foundation.
Protecting your credit during the coronavirus pandemic | Consumer Financial Protection Bureau
Many lenders and creditors report your payment performance to credit reporting agencies (also known as consumer reporting companies or credit bureaus). This includes mortgage servicers and credit card companies, as well as utility providers, cell phone service, landlords, and others that you owe money to and who provide data on accounts in collection.
If you are having trouble paying your bills, it’s important to reach out to your lender or creditor. Many lenders and creditors have announced proactive measures to help borrowers impacted by COVID-19. The Coronavirus Aid, Relief, and Economic Security (CARES) Act has forbearance and credit reporting requirements that may apply to your situation.
As with other natural disasters and emergencies, your creditors or lenders may be willing—and in some case are required—to provide forbearance, loan extensions, a reduction in interest rates, and/or other flexibilities for repayment.
Some lenders are also saying they will not report late payments to credit reporting agencies or are waiving late fees for borrowers due to this pandemic.
Under the CARES Act, in certain situations, lenders are required to report your accounts as current.
You can reach out to your lender or creditor and find out what options or programs are available. These programs are sometimes called “hardship” or “relief programs.” These programs may allow you to enter into an agreement to:
- Defer or pause one or more payments
- Make a partial payment
- Forbear (temporarily stop paying) any delinquent amounts
- Modify a loan or contract
- Receive a suspension for federal student loan payments
- Other assistance or relief
The CARES Act calls these agreements “accommodations.”
To reach out to your lender, look for a customer service number on a copy of your bill for your mortgage, credit card, auto loan, or other loan.
Some lenders are facing high call volumes because of the pandemic, so the wait time may be long.
You can also check your lender’s website to see if they have information that can help you, ways to communicate electronically, or online applications for hardship programs.
When contacting your lenders, make sure you have your account number and payment information available.
Be prepared to discuss your financial and employment situation, as well as how much you can afford to pay considering your income, expenses, and assets. Have a list of questions prepared in advance.
You want to make sure you’re completely comfortable with the terms before you make an agreement.
Here are some key questions to ask:
- If I can’t make my payment as a result of the coronavirus, what are the hardship or relief programs available?
- Are there fees associated with any of these programs?
- Will I have the option of deferring the repayment of any amounts owed to the end of my loan?
- If I’m able to defer or lower my monthly payments, will interest continue to accrue during this hardship or relief period?
- How long does the hardship or relief period last and when will I need to start repaying?
- If my financial situation hasn’t changed once the hardship or relief period ends, what will be the options?
- How will this agreement or relief be reported to the credit reporting agencies? Note: that the recently passed CARES Act places special requirements on companies that report to credit reporting agencies if they provide payment relief due to coronavirus.
- For credit cards—will I lose the ability to use my card if I enroll or request relief?
There are special forbearance or relief programs for some types of mortgages. To learn more, go to the Mortgage and housing assistance page.
Depending on whether you were able to make an agreement or accommodation when you talked to your lender, there could be different impacts on your credit reports and scores.
Your credit scores are calculated the information in your credit report. There are credit scores for different purposes and for loan products. Many factors go into computing your credit scores.
Learn more about the relationship between credit reports and credit scores.
Two companies, FICO and VantageScore, among others, create scoring models that analyze your credit and generate a credit score.
You can find out more information of how these companies are responding to the COVID-19 pandemic and treating forbearances and deferrals from FICO and VantageScore .
It is important to keep in mind that different lenders use different credit scores including scores they build and manage themselves.
The CARES Act places special requirements on companies that report your payment information to credit reporting agencies. These requirements apply if you are affected by the coronavirus pandemic and if your lender gives you an accommodation to defer a payment, make partial payments, forbear a delinquency, modify a loan, or other relief.
If your lender does make an agreement or accommodation with you:
How your lenders report your account to credit reporting agencies under the CARES Act depends on whether you are current or already delinquent when this agreement is made. These reporting requirements apply only if you are making any payments required by the agreement.
- If your account is current and you make an agreement to make a partial payment, skip a payment, or other accommodation, then the creditor is to report to credit reporting companies that you are current on your loan or account.
- If your account is already delinquent and you make an agreement, then the creditor cannot report you as more delinquent (such as reporting you as 60 days delinquent when you started out 30 days delinquent) during the period of the agreement.
- If your account is already delinquent and you make an agreement, and you bring your account current, the creditor must report that you are current on your loan or account.
This CARES Act requirement applies only to agreements made between January 31, 2020 and the later of either:
- 120 days after March 27, 2020 or
- 120 days after the national emergency concerning COVID–19 ends.
If your lender does NOT give you an accommodation:
If your lender is not required to provide an accommodation and decides not to make an agreement with you, this will ly impact your credit report. If you are unable to make a payment or a minimum payment as required and you cannot obtain an accommodation, your lender ly will report that your account is now delinquent.
Your lender may offer you or you can request that the lender place a “special comment” on your account noting that the account was affected by a national emergency as a result of the pandemic. The comment will not affect your credit scores, and your loan will still be recorded as delinquent.
But a prospective landlord, employer, or lender may take it into account when considering you for a loan, a job, or housing. The special comment may help a lender or other report user understand that you ordinarily make your payments but could not make payments for a period of time due to the pandemic.
In addition, the special comment is temporary and may only show on your account for a period of time, such as during the time of a declared national emergency. When the lender stops furnishing the special comment information, it disappears permanently and entirely from your credit report.
There will be no record that there was ever a special comment placed on your credit report.
You can also add a “permanent comment” to your credit file saying that you have been negatively affected by the pandemic.
This comment will not affect your credit score, and your delinquent loan will still be reflected in your credit score.
However, the comment will remain in your file even after the national emergency is over, and a prospective landlord, employer, or lender may take it into account.
The CARES Act also applies to certain federal student loans and includes requirements relating to suspending payments and credit reporting. During the period that payments on federal student loans are suspended by the Department of Education, any payment that has been suspended is to be reported as if it were a regularly scheduled payment made by the borrower.
How do I get a copy of my credit report?
Right now, it’s easier than ever to check your credit report more often. That’s because everyone is eligible to get free weekly online credit reports from the three nationwide credit reporting agencies: Equifax, Experian, and Transunion. To get your free reports, go to AnnualCreditReport.com . The credit reporting agencies are making these reports free until April 2021.
Each of the three nationwide credit reporting agencies – Equifax, TransUnion, and Experian – are already required to provide you, on your request, with a free credit report once every twelve months. Be sure to check your reports for errors and dispute any inaccurate information.
In addition to your free weekly online credit reports until April 2021 and your free annual credit reports, all U.S.
consumers are entitled to six free credit reports every 12 months from Equifax through December 2026. You can access these free reports online at AnnualCreditReport.com or get a “myEquifax” account at equifax.
com/personal/credit-report-services/free-credit-reports/ or call Equifax at 866-349-5191.
How often should I check my credit reports after talking to my lender?
After making an agreement or accommodation with your lender, you should check your credit reports to make sure that the agreement or accommodation is accurately reflected. For example, if your lender agreed to let you pause one month’s payment, make sure they didn’t report it as delinquent or a missed payment.
It could take a month or more for the changes from your lender to show up on your credit reports, but you should check them regularly especially if you are or will be in the market for credit, or if your credit reporting data will be used to make a lending, employment, or housing decision about you.
So, check your credit reports after a month or two to see if the reports are accurate.
There are other reports you may want to check too, such as reports that monitor your bank and checking account history, phone, utility, and rental payment history, among others. The CFPB has a list of consumer reporting companies where you can learn more about which reports might be important to you, depending on your specific situation.
You may also be able to get a free copy of your credit scores. Check out the updated list of companies and organizations that said they offer free credit scores to learn about your options for accessing one of your credit scores free of charge.
How can I get errors in my credit report fixed?
If your credit reports are not accurate or don’t reflect your agreements with your lenders, you can check your reports for errors and dispute any inaccurate information.
If you find inaccurate information on your credit reports, use the CFPB’s step-by-step guide to dispute that information with the credit reporting agency and the company that provided that information to them, known as a “furnisher.” After you send your dispute, check your report again.
You may want to wait a month or two before checking to see if the errors have been corrected. You should check your reports with all three nationwide credit reporting agencies.
Your lender or creditor may only report or furnish your information to one credit reporting agency, so checking all three will ensure that you know your information is correctly reported. And if you need to dispute incorrect information, you will know which credit reporting agency to contact.
If your dispute is not resolved with the credit reporting agency, you can ask that a brief statement of the dispute be included in your file and included or summarized in future reports. You can also submit a complaint at any time to the CFPB at consumerfinance.gov/complaint.