iQuanti: Let's face it, it's tough to get a good loan without a good credit score. A low credit score can become an obstacle whether you're trying to consolidate debt or make a large purchase, such as buying a car or a home.
There are a few different strategies to try to build your credit score fast. Find out more about these methods and use them to boost your score for a better loan in no time.
1. Make Bill Payments on Time
The most surefire way to improve your credit is to pay your bills on time. Payment history makes up a significant chunk of how your credit score is calculated, and falling behind on regular payments can become quite damaging.
If possible, set your bills to autopay to make your payments on time every month. Once you start to pay these bills regularly and on time, then you can start to build credit in a much more stable fashion.
2. Higher Credit Limits
Another great way to raise your credit is to request a higher credit limit to your current credit card, or to open another credit card altogether. Gaining a higher credit limit will allow you to move faster in building and maintaining your credit score if you have revolving credit card debt, as it can improve your credit utilization ratio.
However, if your credit utilization ratio is already low, the hard inquiry from a credit limit increase may actually damage your credit score.
Keep in mind, though, that you should only extend your credit limit if you maintain your current line of credit successfully. If your credit is low because you can't make your credit card payments, prioritize debt repayment over increasing your credit limit.
3. Try a Secured Credit Card
Issuers design secured credit cards to help people with low credit scores build their scores safely and effectively. With a secured credit card, you typically put down a security deposit equivalent to the card's credit limit. Then to build credit, you keep the card's balance low and make timely payments.
Secured credit cards can be a great option for people who may not qualify for an unsecured credit card. Paying off your statement balances on time and in full each month and choosing a card with no annual fee means you can start rebuilding your credit at no cost.
4. Pay Off Existing Debt
Paying off existing debt is a fantastic way to build credit and will do wonders for your finances no matter your current situation. Two great strategies for debt repayment are taking care of debts with high-interest rates first or by prioritizing smaller debts while managing minimum payments on high-interest debts.
When you pay off debt, you establish a positive payment history and you take care of added stresses to your wallet. These two benefits can help you build a better score quickly and securely. Paying off current debts will also improve your debt-to-income ratio, making you a better candidate for house and car loans.
Let Your Credit Score Work for You
If you're currently at a low point in your credit score, don't worry. Using these tips, you can build a better credit score fast with a variety of methods that will help you one step at a time.
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Original Source: Four Ways to Build Your Credit Score Fast
