It’s true — there’s no shortcut to achieving a good credit score. It takes years of paying your bills on time and in full, keeping balances low and managing different kinds of debt.
But there are small steps you can take to help your credit, in the same time it takes to watch an episode of your favorite Netflix drama. Options for building your credit differ if you have an established credit history or if you’re new to credit.
If you have established credit
1. Pay down debt
One of the main factors in your credit score calculation is credit utilization, or how much of your credit limit you are using. If your credit cards are nearly maxed out, paying down the balances will lower your utilization and potentially help your score.
Credit experts recommend keeping all balances below 30% of your credit limit — and lower is better.
2. Make an extra payment in a billing cycle
If you cannot afford to pay your credit card balances in full once a month, making multiple small payments can also lower your balances and help your score, says John Ulzheimer, who has worked at credit scoring company FICO and credit bureau Equifax. Credit card issuers typically report payment activity to the bureaus once a month.
3. Request a credit limit increase
If you regularly pay your bills on time, your credit card issuer may agree to increase your credit limit, effectively lowering your utilization. This is a double-edged sword, Ulzheimer says, and works only as long as you keep the balance low.
Before you agree to a higher limit, ask the issuer if raising it requires a hard credit pull, which could temporarily ding your score by a few points. Ulzheimer suggests asking your issuer how much it can increase your limit without requiring a hard pull.
If you are new to credit
4. Become an authorized user on someone else’s credit card
When a family member or friend with good credit habits adds you as an authorized user on their card, you can make charges to the card, but the primary cardholder is responsible for paying the bill.
You don’t have to use the card; simply being an authorized user can build your credit score because it creates a credit history for you. “It’s like a credit card with training wheels,” Ulzheimer says. Most issuers report authorized user activity to the credit bureaus, he says, but it’s worth checking with the issuer before you become one.
5. Apply for a credit-builder loan
A credit-builder loan, which credit unions offer, works differently from a typical loan. Rather than borrowing money upfront, you make fixed monthly payments into a savings account for a specific period of time. The credit union reports your payments to the credit bureaus, allowing you to build a credit score. At the end of the loan term, you can access the money in the savings account.
6. Get a secured credit card
A secured credit card is designed for credit novices. You pay the credit card issuer a security deposit that is often equal to your credit limit, say $500. Then, you use the card and make payments as you would a regular credit card. The issuer reports your payments to the credit bureaus, which helps build your score.
If you miss payments, the bank can take money from your deposit and report your missed payment, which will hurt your score.
Once you have built your credit score to the point where you can get approved for an unsecured credit card, you can either close this account or graduate to an unsecured card with the same bank and get your deposit back.
The downside of a secured card, Ulzheimer says, is the credit limit is typically low, so it’s easy to run up a high balance that hurts your utilization. To avoid this, use the secured card to pay for a small recurring expense, such as a Netflix subscription.
There is another way to work on your score, but it takes longer, says Jane DeLashmutt O’Mara, a certified financial planner at FBB Capital Partners in Bethesda, Maryland. Check your credit reports for errors that may be dragging your score down, she says. If there are mistakes such as a loan you didn’t take or a bill reported as late that you know you paid on time, contact the credit bureaus to dispute them.