11 Ways to Build Credit Fast in 2023
11 WAYS TO BUILD YOUR
CREDIT SCORE FAST
Sometimes we fall short and make bad financial decisions. The good news is that none of what you did in the past is permanent. Thereās not a single credit score that canāt be fixed within one year. Follow this guide to navigate your way to a 700 credit score!
1. Reduce Your Credit Utilization
One of the easiest ways to get an instant boost in your credit score is to simply pay down your open credit card balances. Begin by paying down your open credit card and revolving account balances to 30% or less of the credit limit. For best results, pay your cards to less than 10-15% of the credit limit. Paying these balances down could drastically improve your score ā and QUICK! You can utilize my Debt Chart to see EXACTLY the amount you should pay each of your credit cards to.
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2. Get Your Accounts Current
The first step of building your credit score is getting each of your OPEN accounts current. If the account says āPast Dueā on your credit report for the status of the account, then the account isnāt current. Even if you get negative items removed, your credit score can stay stagnant if you have past due accounts reporting on your credit report. Why? Because the past due remark on your account drives your score down each month it reports late. It starts out being 30 days late. Then 60. Then 90-120 days. After being in the past due status for so long, the account will close and be charged-off. This will be the ultimate setback. Get EACH of your accounts current from the very beginning. Use a comprehensive credit monitoring tool such as Smart Credit or get your FICO score for $1 with MyScoreIQ to see how your accounts are reporting to the current bureaus. If you create an account with my link you will receive one free 3-Bureau Reports each month with your subscription:
Learn More3. Get a Secured Credit Card
A secured credit card is a type of credit card that is backed by a cash deposit from the cardholder. This deposit acts as collateral on the account, providing the card issuer with security in case the cardholder canāt make payments or defaults. You simply give the credit card issuer a deposit and they give you a credit card with the limit being the amount you deposited. For example: I give XYZ Credit Card Company a $200 deposit and they issue me a secured credit card with a $200 limit. After you build your credit enough with the secured card, you should be able to apply and get approved for an unsecured credit card after about a year of successful payments. At that point, you can turn the secured card back in and get your initial deposit back. Some companies will even send your deposit back while the secured account is still open. I recommend opening up the Credit Builder Card because there is no hard inquiry when you apply and there is a 90%+ approval rate regardless of your credit score. You can apply for one below.
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4. Get a Secured Loan
A secured loan works similar to a secured credit card because there is usually a cash collateral taken up front. The collateral, again, is security for the loan issuer in case you default on the loan and stop making payments. You give the loan issuer a cash deposit and they issue a loan for that same amount. You make payments on the loan as if it was a normal loan with normal terms, and after you have satisfied all payments, you can receive your cash deposit back. Nowadays, though, there are more creative ways to make secured loans work to build your credit. Companies such as Credit Strong and Self Lender allow you to open a secured loan account without having the big deposit commitment at the beginning. The Credit Strong and Self Lender accounts both act like a loan all while helping you save and build your credit throughout the program. The principal amount of your payment will go to a locked savings account in which you can unlock and walk away with once you end the program. You can apply for yours below.
Learn More5. Dispute Your Negative Accounts
Step 1: Order Your Credit Reports. No, Credit Karma will not suffice for this. Get detailed credit reports. You can get your FICO score for only $1 with MyScoreIQ. We also recommend using a comprehensive credit monitoring system such as Smart Credit.
Step 2: Get Detailed. Write out and make note of each negative mark on your credit report. Organize them with this Debt Chart.
Step 3: Start Disputing Your Negative Accounts. Send a letter to each credit bureau to launch an investigation on each negative item. There are 10 sample dispute letters you can use in my DIY Credit Repair Kit, which also explains the disputing process step by step.
6. Settle Your Negative Accounts
I always recommend making creditors verify the debt to be accurate first before settling accounts. However, if you want to move fast then settling the accounts that you know belong to you could help speed up the process. Call each creditor you are seeking to settle and negotiate a lower payment in exchange for them removing the item from your credit report. Remember, most of these creditors and collection agencies buy your debt for pennies on the dollar, so use this as leverage when negotiating the settlement.
Learn More7. Ask For a Credit Increase
Contact your current credit card companies and request a credit line increase (without them doing a hard pull). If you are approved, then your credit score should increase because now your utilization rate becomes lower due to an increased credit limit.
8. Become an Authorized User
If you have a close, trusted family member who has a good credit file, have them add you onto one of their positive credit cards as an authorized user or secondary account holder. This will transfer their positive account history and on time payments to your credit file. This could even decrease your credit utilization due to the increased credit limit being added to your credit file.
Learn More9. Student Loan Rehab
If your student loans are in default or say ācollectionā on your credit report: Go to studentaid.gov & apply for student loan rehab. Itās a one time opportunity to pay a very small amount (as low as $5/mo) for 9-10 months and your student loans will come out of default. Right after they come out of default, consolidate them all into one student loan, and then wait 3-6 months later, & dispute the late payments from the original loan servicer.
10. Request a Goodwill Adjustment
If you have been late on an account due to an unfortunate event, you can request a goodwill adjustment. This is basically owning your mistake, explaining why the mistake happened, and how it hasnāt happened again since the event. In most cases, this only works for one late payment OR a series of late payments for the one unfortunate event. A key tip in getting the creditor to accept the goodwill request is offering to put your account on auto-pay going forward. It is completely up to the creditor to accept or deny your request. Thereās a sample Goodwill Letter to use for this type of situation in my DIY Credit Repair Kit.
Learn More11. Monitor Your Scores With Detailed Credit Monitoring
Credit Karma is an awesome way to keep track of things on your credit report, but it doesnāt show the entire picture. A more detailed credit monitoring system is Smart Credit. It gives you reporting from all 3 Bureaus and you will have access to tons of financial and budget tools with their platform. Learn more below.
