Practicing healthy financial habits helps you build your credit. If your credit score is low, you may be able to drastically improve it relatively quickly. Simple strategies and making small changes can yield greater gains that help build your credit. 5 effective ways you can build your credit are: 

  • Pay All Your Bills on Time. A critical strategy to prioritize is paying your bills on time. Payment history is one of the most important factors that impact your credit score. In fact, payment history can make up more than a third of your credit score. For example, for FICO credit scoring systems, payment history accounts for 35% of one’s credit score. You should pay your bill on time, even early if you can. A few tips you can integrate to help you with this are: 
  • Setting up automatic payments. Automatic payments allow the provider to receive payment on or before its due date. This means you don’t have to worry about missing a payment!
  • If you do not want to use autopay, set reminders on your phone to make your payments before the due date. 
  • If you are unable to make a payment, contact the lender head of time to discuss what options are available. Making arrangements in advance can prevent this from being reflected on your credit score. 

Late payments can last on credit reports for up to 7 years. This makes it more difficult to rebuild and/or have more access to credit. Even if you can only cover the minimum amount, be sure to make payments on time and consistently! 

  • Get a Secured Credit Card. Another useful way to build credit fast is by using a secured credit card. This type of credit card is for people who are rebuilding their credit. It required a cash deposit which serves as the credit limit. This means that if you choose to put down $300, then $300 is your credit limit. This collateral allows the creditor to take it if you are unable to make (or miss) a payment. This is the only difference between a secured credit card and a conventional credit card. A secured credit card can be used with the same vendors and for the same purposes as other credit cards, it just has a smaller limit. So you should use this type of card for smaller purchases, allowing you to spend within your means and build your credit.  There are different types of secured credit cards, be sure to use a secured card that reports your activity to all major credit bureaus. 

  • Become an Authorized User. Becoming an authorized user means that your name is added onto an existing credit card account that is not yours. If you have a relative, friend, or partner that has high credit, adding your name to their account can benefit you too! Your credit score can be enhanced from your history of on-time payments. You do not even have to actually use the card so the account holder does not have to give you access, easing any anxiety they may have when you ask! You don’t have to have the account number, be aware of the limit, or use it for your credit to also improve. This strategy can help you build your credit fast because as soon as you are added to the account, payment information is reported to credit bureaus. 


  • Pay Debts Strategically. Dealing with any debts in collections is a useful and quick way to improve your credit score. Paying off a collections account allows you to request that the collection agency stop reporting the debt which is a serious negative mark on your credit report. 


  • Monitor and Address Credit Report. It is important to track the information on your credit report regularly. Monitoring this information is beneficial for a variety of reasons including that it allows you to follow your progress as well as to check (and address) any errors you may find. Errors in your credit report can negatively impact your credit score. Common mistakes can include payments marked as late, another person’s credit activity that is on your report, information that should no longer appear on your report, etc. it is important to address any errors you find as soon as possible so that your credit score can be accurate.