How to Build Credit Faster – 4 EXTRA Methods

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Some of you may have already read my previous article on how to build credit faster, but I mentioned there that there are several methods to build credit and I didn’t want to make that article too long.

So I wrote this separate article to provide more helpful methods to help you build your credit score.

There’s no particular order in which you have to read these articles. They are equally helpful in whatever order you read them, but I highly recommend you to go read that one as soon as you’re done with this one!

You’ll be glad you did because after you implement what you’ve learned on this website, you will see your credit score build higher and higher as time moves forward. And you’ll be many steps closer to financial freedom.

Without further ado, let’s learn how to build credit faster with these 4 EXTRA methods.

Avoid Consecutive Hard Pulls

Also known as a hard inquiry, a hard pull takes place whenever you apply for a loan or credit card, and the issuer has requested to look at your credit file. They do this to determining how much risk you pose as a borrower.

Unfortunately, every time they have to pull this information, this inquiry shows up on your credit score and it generally hits it negatively. You’ll often take a hit of 10, 20, or sometimes more points for a hard pull on your credit score.

You want to avoid having multiple hard pulls on your credit in a short period of time because it takes some time for your score to recover from one.

Let me give you an example, let’s say that you plan on buying a house this year. Since this is going to take place within the short term, you don’t want to be applying for other things that may require another credit inquiry, for example, buying a new car.

If you apply for a loan to buy a car and 3 months later you apply for a mortgage, your mortgage lender will see this dip in your score instead of seeing your higher credit score prior to the car loan. Thus, your chances to get approved for the mortgage are now lowered, AND your credit will take another hit and go further down because you had another hard pull on your credit from the mortgage lender.

If you’re planning on making big purchases soon, plan ahead. Make sure not to make a bunch of purchases so consecutively. More than just hurting your score, they’re probably becoming toxic spending habits.

Dispute Possible Errors

Sometimes, errors are made on credit reports and it is important to point these out and dispute them with your credit bureau.

This is actually something that personally relates to me. A few years ago (when I was 19), someone applied for a credit card using my social security number.

In other words, I had been a victim of identity theft and I had no idea. Since at the time, I did not like credit and I was a big Dave Ramsey follower, I never bothered to check my credit history because I didn’t use credit.

It wasn’t until a couple of years later, when I was 21, that I made the choice to get a credit card after learning about their benefits. When I was applying for credit though, I wasn’t having very much luck with approval. It wasn’t until I got accepted that I checked my credit and saw that there was a credit inquiry for a credit card almost two years before.

The first thing I did was call the Equifax credit bureau to dispute the issue. To summarize what took place, the issue was settled and I was able to get it off my credit report. They mentioned that it wasn’t a significant issue affecting me anymore because I almost passed the two-year mark since the inquiry took place. Nonetheless, it was good to take that inquiry out of my report as it wasn’t done by me.

A lot of people aren’t aware that simply disputing issues with your credit bureau is a simple solution to your problems. Some people even like to write letters to the credit bureau to dispute errors. There are actually templates online to help you do this. Take advantage of them!

It will save you a big headache and I can say that from experience.

Get a Credit-Builder

This isn’t an option that I would personally advocate for but it’s on this list because it might be a good option depending on your individual circumstances.

This is not a traditional loan. A credit-builder loan is an option that helps you save money while you build credit. This is how it works: the lender will lend you a set amount of money, typically $1,000 or less. This borrowed money is set aside in a secured savings account or a certificate of deposit (CD).

These loans typically have a repayment term – with an interest of 6% – 16% – of 6 to 24 months, so it’s a short-term loan.

To get the most of these loans to build your credit, you want to complete the entire term and make all of your payments on time. Otherwise, its purpose will not be served.

This is a good option for those who have no credit to start with, and it gives you a few extra bucks at the end of the term that you may not have even planned on saving.

There are two reasons why I don’t like these loans. One reason is that the interest they charge is money that will not come back to you. The reason why is the second reason I don’t like these loans, and is that the interestest rate will never be lower than the interest that the savings account (if they offer anything) or CD offers you.

I would simply go with a secured credit card to start building credit, but I understand that there are individual cases where this may not be possible. If that happens to be you, this is an alternative for you to build credit!

Get a Co-Signer for a Loan or Credit Card

If you have low to no credit, you’re not going to have very much luck applying for a loan or a credit card. A method to help you out with this is to get a co-signer to help you get approved.

A co-signer is a person – such as a parent, close family member, or friend – who is responsible to pay back the loan if you default on it. This can benefit both you and your lender because it means they are taking on less risk and you have more chance of approval.

Typically, a co-signer is widely acceptable for car loans. However, if you’re looking for something else like a credit card, only some credit cards will allow you to have a co-signer, others might not.

Having a co-signer for a loan or credit card will help you obtain a larger credit line to help you build your credit, as long as you’re being responsible with it.

Final Words

Building credit is a great thing to do if you can manage it correctly. If you have uncontrollable spending habits, it’s probably best to just stay away from credit in the first place because it will do nothing more than dig you in a hole.

If you’re responsible with your credit, it can serve as a powerful wealth-building tool. If you haven’t already, go check out my other article on how to build good credit fast. It is an addition to this article.

If you have any questions or personal experiences, please leave them in the comment section below! I’m always happy to read and reply to each of you!


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24 Comments

  1. This is exactly what we all need in case we are approaching some important aspects of life. I just started my credit building journey I think 2 years ago now and so far so good. I appreciate the info you provided as I was wondering how to build credit faster as I would like to get some greater amounts soon 🙂 

    1. Greater amounts of cashback? Or loans? haha And I’m happy to hear this was helpful 🙂

  2. Hi Misael! Thanks for sharing with us these methods. I think we can build credit more quickly by starting with one account. Then gradually adding new credit cards or other accounts every six months. 

    I have set a goal of build a “decent” credit score in 2 years to build a “decent” credit score. Let me see how it turns out. These 3 months have been good!

    1. I’m very happy to hear that Ann! Thank you for your comment!

  3. It’s crazy how many of my friends don’t care about their credit or don’t know how bad theirs is. It such an important part of being an adult and necessary for so many big life changes, buying a car, buying a house, certain careers. Credit plays a big factor and having bad credit can ruin your chances. It amazes me when people don’t pay attention.

    1. Right! It amazes me as well. I just don’t understand it

  4. It is definitely too easy to get credit nowadays, and before you know it you could be in a lot of trouble debt wise.

    I have only my cell phone accounts and my car that I pay back. I closed all my clothing accounts, as I feel if I don’t have the cash to pay for these items, then I mustn’t buy them.

    Is this enough to build a good credit rating? Surely if you are paying off your phone account each month and your loans, this will also be considered?

    1. As long as you are paying your debt on time and you avoid having any revolving debt, you are gold. If you closed accounts that you do not need and are only keeping accounts that you actually use for expenses that you would have to make anyway (credit or no credit) then you’re on the right path!

  5. This is a great piece of advice for everyone to hear and learn. I remember way back when I didn’t know anything about credit score. It was like something secret about you they would never expose because it was their tool to judge you with. I was always good with my money and I wouldn’t borrow unless I really wanted something big like a car or home. This was plenty to build my credit up to the point about 8 years later I went to get a loan and the woman said, “Wow, you have a great credit score so there is no problem there. Ok, so how much do you want?”.

    Later on, I also learned that hackers and fraudulent people target those with the big score because it’s so easy to take out a loan in their name. There are now fake sites online that offer free credit scores if you apply. They are only collecting your information and then tell you it’s great. They will then try and take out a loan under your name over the next few months.

    Anyway, I think you did a great job explaining the whole credit score thing and how important it can be.

    1. Great points! All very true. Thank you so much for your feedback!

  6. Good morning, I’ve been following your posts on building a good credit score to achieve financial freedom, and I learned a lot from it. I am very glad to have come across this article on how to build credit faster. I also find it very educative and informative too. I must agree with you that we must read our credit reports to check if there are any errors to be corrected, but most people become very lazy when it comes to reading. This post is truly amazing and I will be sharing it further too. Thank you for sharing it with us.

    1. thank you 🙂

  7. How did you know that I was in debt? Well, I guess I always am. 

    That’s a really great article on how to always be ready for some more credit. In fact, I had not even heard of credit-builders. What an awesome concept. Saving while you build credit. A co-signer is another fabulous idea, and it’s so simple that I now wonder why I never thought of it myself. 

    deep regards, and love

    Aps

    1. thank you for your feedabck ! haha well most people now a days are in debt, lucky guess 😉

  8. Thanks for this really useful information on building credit scores.

    It is essential for young people to realize the importance of building a good credit score early on in their working life and not to wait until they are about to apply for a loan or a mortgage.

    I think your first point on avoid hard pulls is crucial to learn.  While I never had any problems with my credit score, I was certainly not aware of this until more recent years.  If you need a loan or whatever,do your studying and analysing of the different products first.  Then only go looking for them when you are pretty sure what you are after.  Just applying to here and there and see what happens is extremely dangerous and to be avoided at all cost.

    1. Yup! Thank you for your feedback 

  9. Hi Misael, As our credit rating and score affects the offers and amount of credit that we can have access to, it’s very helpful to know the “rules” of the game in order to make the best choices. These 4 tips for building credit are solid tips to help a person get a higher credit score so that they can afford the things they want and need in their life!

    1. Yes, I definitely agree!

  10. Sensible solutions for maintaining a credit rating here. Personally I have never checked my credit score, and don’t see any need to. I gave up credit cards years ago, it seemed if I had some unused credit on my card I received a letter in the mail asking if I would like more. So it felt like a trap and I just paid them out. It did take some time though with the first step being cutting up the card. But I never felt deprived of anything, so maybe I never needed it in the first place. 

    1. Hey, credit is definitely not for everyone. Your personal circumstances have shown you that, I have no disagreement with that!

  11. Thank you for the post.

    I found the article interesting and helpful.  I shared it with my son who is on his way to building credit.

    I found there to be plenty of content and the site to be easily navigable.  I was not aware of the details of “hard pulls” impacting credit scores.  My experience was most business will state the credit check does not impact your score, who knew.  I bookmarked the site and will reference it from time to time so see what you have added.

    Keep up the good work, credible, easy to navigate, pertinent to all who use or have credit.  You are well on your way.

    1. Unfortunately, several companies lie about that. It’s better to simply be informed. I appreciate your feedback and you sharing this with others!

  12. Oh…I see. This is an enlightening post. Thanks for reminding.

    So far, reviewing my credits in the past years, I have not missed any due payment and I can see that I am building a good credit through time because I am being approved for another loan from the same company and my credit limit is increasing.

    Although, I would say that my credit building is not yet that past. I had uncrontrollable spending 2 decades ago and unwise spending for past years until 2019. 

    It may take a while until I fully regain that good credit , but probably not that long with your wise advises for me to comply. I would also like to apply looking into possible errors and disputing to correct. 

    1. Heck yeah! I’m glad to hear that you’re no longer in that situation of bad spending. Check out those credit reports, you might be able to give a boost to your credit if you correct any errors that might be on there! And no worries, more educational content is on the way!

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