Advertising
Advertising

Last Updated on March 3, 2021

Top 6 Hacks on How To Build Credit Fast

Top 6 Hacks on How To Build Credit Fast

When done right, credit can open doors and provide a lifestyle that you never imagined possible. Anything from flying around the world in first-class and staying at 5-star hotels entirely for free to starting and scaling businesses. It’s also an area where it can be easy to make mistakes and hard to recover from without the right information. In this article, I will break down how you can build credit fast so you can open doors in your life!

When you start to think about improving your credit score, you have to answer three important questions first:

  1. What are you trying to achieve by having good credit?
  2. What really is your credit score?
  3. How is your credit score calculated?

What Are Your Credit Goals?

Having a high credit score is great, but ultimately, your credit score is a tool in your personal finance arsenal that you can use to open doors. The first question you should ask yourself is “what will a higher credit score do for me?”

I work with many clients directly at Freedom Travel Systems to help them fully leverage the power of their credit so they can enjoy free luxury travel and start or grow their business. For my clients and many others, here are a few common goals many credit-savvy individuals have:

  • Free Travel – getting access to travel rewards cards so you can get tons of free travel and even get first-class flights, hotel suites, and luxury amenities all for free
  • Start/Grow a Business – getting access to business credit so you can start and grow a business with 0% or low-interest financing that does not impact your personal credit
  • More Approvals – getting approved for credit cards, auto loans, or mortgages so you improve your lifestyle or build your personal wealth
  • Better Rates – getting better interest rates on any loans you get will save you tens or hundreds of thousands of dollars over your lifetime

What Is Your Credit Score?

Your credit score is simply a 3-digit number that tells potential lenders how reliable of a borrower you are. Keep in mind that lenders, such as banks and credit issuers, stay in business by lending. Their goal is to find the people that have the highest probability of paying them back and they assess this primarily through your credit score.

What’s important to know is that there are two major scoring models used to create your scores. These scores are your FICO Score and your Vantage Score. More than 90% of lenders rely on your FICO score, so when you are checking your score, you want to make sure you see the actual score that the lenders use. And no, checking your own score does not hurt your credit!

Advertising

Then enters the 3 main credit bureaus, which are essentially agencies that collect credit information on you. These are Experian, Equifax, and TransUnion. These bureaus then apply a scoring model to the information they have on you and voila, you now have a credit score! Bureaus sometimes have different information on your report, which is why you will see 3 different scores.

How Is Your Credit Score Calculated?

Next, you need to understand how the credit score is calculated. This will provide a high-level overview, but there is more detail to each of these factors alone.

There are 5 main factors in the calculation of your credit score:[1]

  1. Payment History (35%) – This refers to the amount and percentage of on-time payments you have.
  2. Utilization (30%) – This is how much revolving credit you use as a percentage of the total revolving credit issued to you. Note that installment loans like auto-loans or mortgages do not count towards this while credit cards do.
  3. Age of Credit (15%) – This refers to how long your credit history is, primarily your “average age.”
  4. Credit Mix (10%) – This is how many different types of credit you have. For example, there are credit cards, student loans, auto loans, mortgages, personal loans, and lines of credit.
  5. New Credit (10%) – This primarily refers to how many inquiries you have for new credit.

Top 6 Hacks on How to Build Credit Fast

Now that you’ve learned more about your credit score, here are the top 6 tips on how to build credit fast.

1. Don’t Close Your Cards

Many of us are taught that getting a new credit card is bad and having too many will hurt your score. In fact, the opposite is true. You want to have many positive accounts reporting to your credit report. Logically, this makes sense because having more accounts with more on-time payments shows that you are a more reliable borrower. You just don’t want to open too many accounts too quickly since that can hurt your “new credit” factor.

Instead of closing a card, what you should do is simply keep the card open and put a small subscription service on it monthly. Why? Because each time you have an on-time payment, it helps build your payment history, the largest factor of credit.

Advertising

If you close a card, you are missing on potential on-time payments, age of credit, credit mix, and also lowering the total credit lent to you so your utilization percentage may go up. If you have an annual fee on a card you don’t like, see if there is a “no-fee” version of the card and downgrade it to that card rather than close it.

2. Use Autopay to Never Miss a Payment

This one is easy to do and easy not to do. Go into your credit card account and set up auto-pay. You can choose to either pay the full amount, the statement balance, or the minimum payment. Personally, I like to set up autopay to pay the minimum payment so that I never get a late payment. Then, I go in and manually pay the statement balance each month by the payment due date.

This helps me personally see my spending and have a manual review of my charges while ensuring, not have to pay interest, and still get the benefit of making sure that I never miss a payment if something goes wrong. Think about it, if you were to have a medical or family emergency, the last thing you want to experience on the back end of that is a late payment and a drop in your credit score. So, set up autopay.

A pro tip is to update your payment due dates across all bills and accounts to be the same so that you can “time batch” the process and have one time a month where you sit down and handle your payments. You can do this by simply contacting the credit card company or doing it online.

3. Get a Credit Limit Increase to Lower Your Utilization

One of the factors that get most people into trouble is using too much of their allotted total credit. Their utilization, which is the percentage of revolving credit they use, goes up, and their score tanks. You should aim for less than 30%, and in an ideal world, less than 10%.

To help drive this down, call your credit issuer and ask for a credit limit increase. This will help increase the total amount of credit extended to you and drop your utilization. Oftentimes, they will only give it to you when your utilization is fairly decent (less than 50%), so work to pay it down as best as possible before doing this. You should ask if the credit limit increase will give you an inquiry as some banks do a hard inquiry while some do not. If they do a hard inquiry, it is often better to just get a new card altogether or pass.

Advertising

4. Add Authorized Users to Increase Your Age, Add History, and Decrease Utilization

This is one of the best hacks out there as it helps with the 3 biggest factors of improving your credit: payment history, utilization, and age. This concept is also called “credit piggybacking” where someone with great credit history on a card adds an authorized user (AU) to the card. When the AU gets added, the credit history and information from that card are added to the AU’s report!

This is extremely helpful for people with young credit because it can drastically increase your age of accounts. It can also help many people with limited payment history or high utilization.

Please be aware that anything good or bad on that account you are added to will show up on your report. So, you want to avoid any cards with negative marks or high utilization. That being said, it is a one-way street, so nothing that you do with your credit can impact the primary account holder.

This is so valuable that there are companies that sell AU accounts. I always suggest starting with your family and/or personal network first as there are likely people in your network that can help!

5. Space Out Your Application Strategy

New credit is the smallest factor of credit, but it still matters! If you are looking to build up your credit, you should space out your applications. If you apply for too much credit in a short period, it looks very needy in the eyes of the lenders. For this reason, it is safest to apply for cards slowly over time unless you have really studied more in-depth how this works. A good rule of thumb is once every few months.

If you are in the credit game for the hopes of getting tons of credit card points for free travel, which is what I personally take full advantage of, you will want to familiarize yourself with the different bank rules and card promotions to put together the right application strategy. Applying blindly will waste inquiries and leave tons of benefits on the table!

Advertising

6. Review Your Report for Negatives

If you have any negative or “derogatory” marks on your credit report, this will hurt you drastically. They do impact you less as they age, however, you should review your credit report to ensure that everything on your report is 100% accurate and actually yours. Wrong information ends up on credit reports all the time and you will want to take personal responsibility for making sure it is accurate.

The “burden of proof” is on the credit bureau to confirm that any information on your report is in fact accurate. If you find inaccuracies, you can dispute that with them, or you could consider getting a credible credit repair company to help you.

Final Thoughts

There you have it, the top 6 tips on how to build credit fast so you can get closer to reaching your goals. Now that you’ve learned more about how credit score works and how you can improve yours, you’ll hopefully be able to make better financial decisions and achieve your financial goals quicker.

More Tips on How to Build Credit Fast

Featured photo credit: CardMapr via unsplash.com

Reference

More by this author

Tyler Green

Host of Middle Class Money Podcast

Top 6 Hacks on How To Build Credit Fast How To Make a Million Dollars in 7 Steps 10 Best Ways to Save Money Faster and Smarter

Trending in Money

1 40 Healthy And Really Delicious Meals You Can Make Under $5 2 Life Insurance: A Secure Way To Protect Your Future. 3 How To Save Money On Groceries: 13 Quick Tips 4 10 Investment Tips For Beginners 5 Top 6 Hacks on How To Build Credit Fast

Read Next

Advertising
Advertising
Advertising

Last Updated on April 19, 2021

40 Healthy And Really Delicious Meals You Can Make Under $5

40 Healthy And Really Delicious Meals You Can Make Under $5

Ever had those moments where you really wanted to eat something delicious and healthy but didn’t have the financials means to do so? Whether you’re a student or parent, this compilation of 40 great, healthy, and inexpensive recipes will make every night special and help you get fit! No more meals where you have to force the food down! It’s time to make that budget your best friend and turn it into great recipes. Enjoy!

1. Fish Tacos in Crunchy Shells ($3.56 per serving)

Is there a better way to end the day than a Fish Taco dinner filled with protein and nutrients and is easy on the wallet? This recipe calls for a boys’ or girls’ night in front of a good movie or game.

3080

    2. Mini-Meatball Noodle Soup ($3.43 per serving)

    We’ve heard of the delicious spaghetti and meatballs recipes, but imagine having that same meatball goodness in a soup? It’s like Christmas in a bowl. Healthy, warm, and only $3.43 per serving.

    3069_0

      3. Spaghetti and (Vegan) Meatballs ($2.13 per serving)

      Now it’s time to look at the traditional spaghetti and meatballs recipe, but with a little twist: vegan meatballs. This way, you can enjoy the Italian tradition without adding on the extra calories. I’m sold!

      3074_0

        4. Kabocha Squash and Lentils ($3.12 per serving)

        Absolutely delicious way to end the day with a Kabocha Squash and lentils dinner. The beauty of this recipe is that you can actually make many other things from the mixture, from dips to full-on meals. All under $5 per serving.

        Photo-Oct-26-21-e1414441326306-225x300

          5. Baked Coconut Lentils ($0.91 per serving)

          Coconuts are always a good idea, but it doesn’t have to be eaten only for dessert or breakfast. With this great recipe, you can now eat a lunch or dinner filled proteins and a coconut twist. Yum!

          3077_0

            6. Easy Marinated Roasted Chicken ($3.40 per serving)

            We love chicken and at less than $5 per serving, we are in heaven with this recipe. Add some vegetables and rice on the side and you’ve got yourself a full meal!

            3078_1

              7. Organic Greens and Goat Cheese Gratin ($2.36 per serving)

              This is absolutely divine. You get in your healthy greens and your fat macros with this great recipe. Takes only a few minutes to make and it’s easy on the wallet. Bon Appetite!

              Advertising

              3068

                8. Beef Pot Roast ($3.22 per serving)

                One word: perfect. This meal will warm your insides and fill you up with the high protein content.

                3079

                  9. Fajita-Style Quesadillas ($0.43 per serving)

                  If you want to eat Mexican tonight but want to stay in your budget, this Quesadilla recipe is your best friend. It’s tasty and filled with healthy ingredients for less than a dollar per serving.

                  R172184.jpg.rendition.largest.ss

                    10. Fish Tostadas with Chili Lime Cream ($2.82 per serving)

                    Another great lunch idea for the busy days ahead. Prep this in the morning or the night before and you’ve got yourself a healthy and cheap lunch meal!

                    R131419.jpg.rendition.largest.ss

                      11. Beef and Black Bean Chili ($1.36 per serving)

                      Might not look like much, but this amazing chili is actually extremely healthy for you. The protein from the beef and the carbs from the black beans will fill you up in no time, and keep you full for a long period of time. Delicious and warm, just right for the winter!

                      RU193781.jpg.rendition.largest.ss

                        12. Crispy Fish and Peppers ($2.18 per serving)

                        Amazing recipe for anyone looking to change up their meals while keeping their macros in check and not going overboard on spending. Satisfies your crunch tooth (see what I did there?) and gives you all the protein you need to stay full and lean.

                        R150828.jpg.rendition.largest.ss

                          13. Vegetarian Gumbo ($1.50 per serving)

                          You have the perfect macro mix here with the carbs, fats, and proteins. At less than $5 per serving, you’ve got yourself a meal that will last for the whole week!

                          R058526.jpg.rendition.largest.ss

                            14. Mexican White Bean Soup ($0.99 per serving)

                            With the cold weather creeping in, it’s not a surprise that soups are coming back in style. This great Mexican White Bean Soup dish will keep you warm for winter without making a hole in your pocket.

                            RU191493.jpg.rendition.largest.ss

                              15. Black Beans with Mango & Cilantro ($0.38 per serving)

                              Mangoes make every dish a little bit sweeter, which is why we absolutely love this recipe. A normal rice and bean dish might be a little meh, but add the sugary taste of mangoes and you’ve got yourself a party!

                              Advertising

                              Black-Bean-Cilantro-Mango

                                16. Bean Burritos ($0.71 per serving)

                                If you’re having people over tonight and don’t want to spend too much time or money on food, this dish is a great option! You can even cut up the burritos into pieces and make finger foods while everyone’s watching the game or gossiping.

                                IMG_4791

                                  17. Five-Spice Beef Kabobs ($2.43 per serving)

                                  The spices in this recipes add a delicious twist to the beef kabobs, which is definitely worth trying!

                                  RU173795.jpg.rendition.largest.ss

                                    18. Cornmeal Crusted Pork ($1.92 per serving)

                                    If you like the fried crunch but want to opt for a healthier alternative, cornmeal is your man. This healthy recipe will satisfy all your fried desires without making you pop open your pant’s button.

                                    R102170.jpg.rendition.largest.ss

                                      19. Chicken, Tomato & Cucumber Dinner Salad ($2.57 per serving)

                                      Easy to do, extremely healthy, and super delicious. A must-try!

                                      RU172118.jpg.rendition.largest.ss

                                        20. Lentil Soup with Beef and Red Pepper ($1.90 per serving)

                                        I can’t believe how cheap this meal is, especially for all the nutrients it contains. You can make a big pot on Sunday night and divide it into small portions to last you a whole week.

                                        RU202653.jpg.rendition.largest.ss

                                          21. Smoky Mushroom Stroganoff ($1.90 per serving)

                                          Craving pasta but not sure what to top it off with? How about smoky mushrooms with a twist?

                                          R131417.jpg.rendition.largest.ss

                                            22. White Bean Tuna Salad ($1.36 per serving)

                                            You can add this White Bean Tuna Salad in your sandwich or just eat it as-is for a quick lunch on a busy day.

                                            RU206151.jpg.rendition.largest.ss

                                              23. Sausage Eggwiches ($0.80 per serving)

                                              Who says you have to eat fast food to get an eggwich? This delicious recipe will give you an amazingly healthy eggwich for less than a dollar per portion. Can you say Breakfast?

                                              Advertising

                                              Sausage-Eggwiches

                                                24. Baja-Cali Black Bean Salad ($1.17 per serving)

                                                Great snack to add to a movie-night with friends. You don’t have to use chemically-processed salsas anymore, you can now use this homemade salad for your chip dips.

                                                Baja-Cali-Black-Bean-Salad-1024x682

                                                  25. Gnocchi, Sweet Corn & Arugula in Cream Sauce ($2.24 per serving)

                                                  Italians always knew how to make carbs look good! This delicious Gnocchi recipe will give your lunch a whole new meaning. Easy to make and only $2.24 per serving.

                                                  RU173796.jpg.rendition.largest.ss

                                                    26. Vegetable Lasagna ($1.73 per serving)

                                                    If you were looking for a healthy lasagna, you’ve just found it. At under $5 per serving, you can fill yourself up right away without putting on the extra calories.

                                                    R090413.jpg.rendition.largest.ss

                                                      27. Fajita-Ranch Chicken Wraps ($2.05 per serving)

                                                      Don’t know what to make for lunch this week? How about delicious chicken wraps with a healthy ranch? This recipe will make all your lunches, even the quick ones, healthy and colorful.

                                                      R105114.jpg.rendition.largest.ss

                                                        28. Quinoa with Pan Roasted Brussels Sprouts ($1.24 per serving)

                                                        A dish that has quinoa and brussel sprouts can’t be unhealthy, it just can’t, which is why this dish is one to keep in the books. Easy to make, healthy, and will keep you full for a long period of time.

                                                        Quinoa-Brussels-Sprouts

                                                          29. Butternut Squash Chili ($1.04 per serving)

                                                          You don’t need meat to make chili now that you have this recipe! It’s 100% healthy, filling, and smells absolutely delicious.

                                                          Butternut-Squash-Chili

                                                            30. Fast Shrimp Bisque ($2.03 per serving)

                                                            Seafood doesn’t have to be expensive if you know how to do it right, and this fast shrimp bisque is a great recipe to try if you’re in the mood for some seafood!

                                                            RU170895.jpg.rendition.largest.ss

                                                              31. Chicken-Noodle Casserole ($0.98 per serving)

                                                              Looks divine doesn’t it? This super easy to make dish will satisfy all your taste buds without burning a hole in your wallet or adding a few extra numbers on the scale.

                                                              Advertising

                                                              RU161399.jpg.rendition.largest.ss

                                                                32. Burrito Cups ($1.18 per serving)

                                                                Entertaining someone tonight and don’t know what to make as appetizers? These burrito cups are a great alternative to chips or other greasy finger foods. All you need to enjoy it is a spoon and a cup.

                                                                burrito-cups-1

                                                                  33. Lemon-Dill Shrimp & Pasta ($2.45 per serving)

                                                                  Another impressive shrimp recipe under $5 per serving. The lemon-dill twist adds a great taste to the dish.

                                                                  RU172115.jpg.rendition.largest.ss

                                                                    34. Potato Frittata ($0.87 per serving)

                                                                    If you want to eat potatoes for breakfast but still want it to be healthy, this is the recipe for you. At under a dollar per serving, this potato frittata will make you see potatoes in a whole new light.

                                                                    RU170901.jpg.rendition.largest.ss

                                                                      35. Grilled Pork and Pineapple ($2.67 per serving)

                                                                      Meat and fruits? Oh, yes. The juiciness of the pork mixed with the liquid sugar in the pineapple will make you wish you knew about it sooner.

                                                                      R104031.jpg.rendition.largest.ss

                                                                        36. Greek Honey-Lemon Pork Chops ($2.15 per serving)

                                                                        Another splendid recipe mixing sweet and salty for a healthy meal. Easy to make and absolutely mouthwatering.

                                                                        RU187523.jpg.rendition.largest.ss

                                                                          37. Jamaican Pork Stir-Fry ($2 per serving)

                                                                          You can add this healthy stir-fry to any dish as a side or amply enjoy it as-is for lunch or dinner. You can even make a wrap sandwich out of it if you’re in a rush to eat.

                                                                          RU170642.jpg.rendition.largest.ss

                                                                            38. Herbed Salmon ($2.49 per serving)

                                                                            Salmon contains a healthy dose of fats that will boost your metabolism, lower inflammation, and make you happier. At under $5 per serving, need I say more?

                                                                            R166367.jpg.rendition.largest.ss

                                                                              39. Five-Spice Pork Kabobs ($1.96 per serving)

                                                                              Exquisite recipe under $5 per serving that will most definitely awe everyone at your dinner party.

                                                                              R166368.jpg.rendition.largest.ss

                                                                                40. Stuffed Sweet Potatoes with Mango-Black Bean Salsa ($1.24 per serving)

                                                                                You don’t have to eat sweet potatoes alone anymore with this flavorful recipe.

                                                                                stuffed-sweet-potatoes

                                                                                  Featured photo credit: Featured Photo Credit: 5 Dollar Dinners via 5dollardinners.com

                                                                                  Read Next