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The Best Quick Trick to Start Building Your Credit Fast

Georgia McIntyre

Georgia McIntyre

Finance Writer at Fundera
Georgia McIntyre is the resident Finance Writer at Fundera. She specializes in all things small business finance, from lending to accounting. Questions for Georgia? Comment below!
Georgia McIntyre

We’re thinking of a number between 300 and 850… and it’s your credit score.

Do you know what it is? And most importantly, is it where you want it to be?

Unless you have an absolutely perfect credit score—850—we’re willing to bet that you’d like to tack on a few points to that three-digit number.

Building credit fast is no easy task. Your credit rating is with you for the long-haul and is built up over years and years of credit history—so it won’t just change overnight.

But there are things you can do to bump up your credit score quickly.

When it comes to building credit fast, here’s what we recommend: credit monitoring.

We strongly believe that the more you know about your credit rating, the better you can take care of it.

Building credit fast is hard, but credit monitoring can help.

Here’s how.

Why You Need to be Monitoring Your Credit

If you’ve ever applied to small business loans before, you know just how crucial your credit score is. It’s probably the single most important piece of information on your business loan application.

And that’s not just for business loans. Your credit rating is considered for any big financial move in your life.

When you’re taking out a mortgage, applying for an automobile loan, getting a credit card, securing a student loan, or even landing your dream job… your credit score matters—a lot.

We could talk about how important your credit score is all day. But it all comes down to this:

Having a great credit score can save you thousands on your personal (and business) finances. On the other hand, black marks on your credit rating can really limit your financial options.

That’s why anyone who’s interested in building credit fast needs to be monitoring their credit score carefully and often.

A Run-Through Of Your Credit Score

Monitoring your credit—and building credit fast—first comes down knowing what actually goes into your credit score.

So here’s a quick credit score refresher:

Your credit score measures how reliable you are with your financial obligations. When a lender, a bank, or even a potential employer looks at your credit score, they’re essentially asking themselves this: “Can I trust you?”

A stellar credit score shows that you’re responsible with your financials and a safe borrower to work with. On the other hand, if your credit score suggests that you often don’t repay what you owe—or you’re always late to repay—lenders are less likely to trust you with their money.

What Goes Into Your Credit Score

There are three main credit reporting bureaus that monitor your personal credit score: Equifax, Experian, and TransUnion.

They each have their own formula for reporting your credit score—and none of them actually tell us what that formula is.

But we have a good idea of what matters and what’s not as important.

Here’s what they pay attention to:

  • Payment history (including bankruptcies and judgments)
  • Amount of debt you have
  • Age of your open credit accounts
  • Diversity of credit accounts
  • Your credit utilization (or how much of your available credit is actually being used)
  • Tax liens
  • Hard credit inquiries

Now that you know what makes up your credit score, you’re ready to monitor your score—and start building credit fast.

Best Practices for Monitoring Your Credit Score

There is no cut-and-dry formula for how you should monitor your credit score.

But when it comes to building credit fast by monitoring your score, here are the steps you can take:

Know Your Credit Report Like the Back of Your Hand

Your credit report is a summary of your borrowing and repayment history—and it’s the backbone of your credit score.

Every piece of information that’s used to calculate your credit score comes from your credit report. So it pays to know and monitor exactly what your creditors are seeing on your credit report.

If your credit report shows that your late bills are weighing your score down the most, then you can put more effort into paying your bills on time. If your report shows that you’re being dinged for having too high a credit utilization, then you can reign in on your usage instead.

All in all, monitoring your credit report keeps you up-to-date on what’s affecting your credit score. By staying on top of your report, you can change your borrowing behavior when any red flags arise.

Building credit fast isn’t easy, but monitoring helps you stay on your toes and make changes in your borrowing habits where necessary.

You of course can’t monitor your credit report if you don’t have access to it. So check out annualcreditreport.com to get your report for free. You’re also entitled to one free credit report once a year from each of the three credit reporting agencies.

Check Your Credit Report For Errors

When it comes to building credit fast, monitoring your report for errors is an easy, effective step you can take to boost your score.

You’d be surprised by how often you can get dinged for things you didn’t actually do. In fact, studies show that 1 out of 5 credit reports contain errors in them. And when those errors were corrected, credit scores increased. (If that’s not evidence of how crucial credit monitoring is to building credit fast, we don’t know what is.)

When you find an error in your credit report, dispute it.

If you’ve never disputed an error on your credit report, here’s how:

Check all three of your credit reports—if an error has popped up on one of them, you’ll want to see what’s going on with the other two. Next, make sure it’s really a mistake. Just because you might be surprised by some negative information on your report doesn’t mean that the information is inaccurate. If the blip on your report did result from a misstep by the credit bureau, now it’s time to gather documentation to prove your case. This could be proof of payment or a correspondence related to the charge in question. You’ll also need to have a copy of your credit report with the disputed charges clearly highlighted.

Once you’ve gathered the documents you need to support your claim, write a letter to the credit bureau reported the error. Check out the Federal Trade Commission’s example of a dispute letter for help. You can also dispute an error on the credit bureau’s website, too. Once you’ve submitted your claim, you should hear back within 30 days.

3 Other Things You Can Do to Build Credit Fast

We stand behind the fact that monitoring your credit is the most effective way to build your credit score. Being able to detect small changes to your credit report (and fixing them if need be) will help you boost your score quickly.

While this is the best “trick” in the books, there are other things you can do to build your credit fast.

Pay Down Your Balance

Of all the factors that make up your credit score, 30% of it comes down to your amounts owed.

But it’s not just how much you owe, it’s more about how much you owe relative to your credit limits (how much you can borrow). So if you’re taking up a lot of your credit limit with high balances, try paying them off.

Say you have a $8,000 credit limit, and you currently have a $4,000 balance on that account. That’s a 50% credit utilization. Best practice is to keep your credit utilization below 30%.

And paying down a balance with high utilization could be the quick boost that you’re looking to have with your credit score.

Get a Credit Card

It may seem obvious, but if you don’t already have a credit card, getting one will help boost your score—fast.

Having one or two cards that you use responsibly can help show that you practice good borrowing behavior—and you’re deserving of a higher credit score.

With that being said, you don’t want to apply for a bunch of credit cards in a short period of time. This is typically an indicator of risky behavior to the credit reporting bureaus.

Pay More Than Once a Month

This tip is especially important if you tend to carry high balances on your credit cards.

You’re told to pay your credit card statements at the end of the month. This is a good practice, but the credit reporting agencies don’t all collect information on your balance on the last day of every month. They can be collecting information throughout the month, when your balance was high (even though you planned on paying it down fully at the end of the month).

This can be risky for borrowers who use more than 30% credit utilization on their accounts.

An easy way to boost your credit fast is to try to pay twice a month so credit reporting agencies aren’t seeing too high of balances on your account.

The Bottom Line on Building Credit Fast

If your credit score isn’t where you want it to be, there’s no overnight solution that can bring it up a notch.

But if you know what’s bringing your credit score down, you’ll know exactly what you need to do to bring it up. And the only way to stay up-to-date on your credit score is to monitor it closely.

Once you make the quick fixes that are hurting your score, you’ll start to see it rise within a few weeks!

Editorial Note: Any opinions, analyses, reviews or recommendations expressed in this article are those of the author’s alone, and have not been reviewed, approved, or otherwise endorsed by any of these entities.
Georgia McIntyre

Georgia McIntyre

Finance Writer at Fundera
Georgia McIntyre is the resident Finance Writer at Fundera. She specializes in all things small business finance, from lending to accounting. Questions for Georgia? Comment below!
Georgia McIntyre

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