Establishing credit history from scratch is a very important step to building a solid consumers’ credit history. It is no secret that lenders lend money to those who have proven their creditworthiness to lenders. Some lenders have no established credit, but it doesn’t mean that consumers cannot build their credit for the future. Consumers can build credit fast by doing a few things.
How to Build Credit History Fast
- Apply for a credit card. Owning a credit card can help consumers build credit fast. When consumers pay their credit card bills on time their credit score rises. There are credit cards available for all spending needs. Consumers can find applications in the mail or online when they want to apply for a credit card.
- Use credit on a regular basis. The key to raising the credit score is to use the credit card on a regular basis. Consumers should try to make at least one purchase each month with their credit card. It really doesn’t matter how much consumers purchase; they just need to make a purchase.
- Maintain low balances on all debts. Maxing out credit cards will actually lower credit scores instead of raise them. It may be a good idea to pay off the credit card balance every two months so that the lender has something to report to the credit agencies. Keeping the balance as low as possible will help improve credit scores.
- Pay bills on time. A consumers’ payment history accounts for a large portion of their credit score. When lenders pay their bills on time their credit score increases. Consumers should make sure that their bills are paid on time each month. Setting up an automatic payment plan can ensure that consumers pay bills on time.
- Keep credit card balances under 30%. Credit card balances that are over the limit can quickly lower credit scores. Consumers must make sure that they keep the balance of their credit cards under 30% because balances over 30% can definitely lower credit scores very quickly.
- Pay off debts early. Making an extra payment on mortgages, car payments, or other loans can quickly raise the credit score. If consumers pay off a one-year loan in just three months, they can increase their credit score and save a substantial amount of money in the process.
- Make sure that there are no errors on credit reports. Over half of consumers’ credit reports contain errors. Those errors can lower the credit score and potentially cause consumers to be denied credit. Consumers should verify that all debts on their credit report are theirs. They may be surprised how quickly their credit score rises once errors are removed.
- Increase credit limits on debt. This is one of the ways that many consumers choose to raise their credit score quickly. Increasing the credit limit helps consumers to increase their available credit. Lowering the credit balance can have a remarkable impact of credit scores.
Even those who have yet to establish their credit can quickly build their credit and raise their credit score. Credit is very important to have so consumers are making a wise decision by establishing their credit easily.