8. USE A SECURED CREDIT CARD
Why this works slowly: Builds positive history gradually as on-time payments add up.
A secured credit card requires a cash deposit upfront, which usually becomes your credit limit. You use the card like a regular credit card, and making on-time payments can help build your credit. This is most likely to help someone new to credit or someone looking for a way to add positive credit history to soften the effect of past mistakes. However, be sure to pay your bill each month. A missed payment could result in a late fee or force the issuer to use your deposit to cover the debt. Quick tip: Look for a secured card that reports your credit activity to all three major credit bureaus to get the biggest boost.
9. ADD TO YOUR CREDIT MIX
Why this works slowly: Opening a new account can cause a short-term dip in your score, but steady on-time payments and a stronger credit mix can help over time. An additional credit account may help your credit, particularly if it is a type of credit you don’t already have. If a secured card isn’t an option because of the deposit requirement, a credit-builder loan may be a lower-cost choice. Before you apply, check that the loan reports payments to all three credit bureaus. You can confirm this on the lender’s website or by asking directly. If you already have loans but few or no credit cards, opening a new card may help. A new card can improve your credit mix and lower your overall credit utilization by giving you more available credit. Quick tip: Consider whether the time spent researching providers and applying is worth the potential lift to your score. Weigh what you’d pay in interest and fees if you’re getting a loan or card strictly to improve your credit.
The article How to Build Your Credit Score Fast: 9 Strategies That Work originally appeared on NerdWallet.
AMANDA BARROSO writes for NerdWallet. abarroso@nerdwallet.com
19
Powered by FlippingBook