7 Credit Building Techniques
Credit scores are often the defining factor in aspiring homeowners qualifying for a home loan, or prospective renters getting a rental application accepted for a property. Scores range from 300 to 850, & the minimum threshold for loan qualification usually hovers around a 580 FICO. If you're below this mark, or just want to improve upon an already sufficient score (which can go a long way in securing low interest rates), feel free to employ any of the tactics below that are shown to boost credit quickly.
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 1. Pay Credit Card Balances on TimeÂ
Nothing is going to damage credit quicker than missed payments & accruing debts. Paying credit card balances in a timely manner is imperative to begin the climb to the 600s, 700s, & eventually, 800s.
 2. Ask for Higher Credit LimitsÂ
After a while of successful credit card payments, an account holder can ask for a higher credit limit, giveing them more access to funds based upon their previous success. This boosts the chance to keep the credit utilization rate below 50%, which is key!
 3. Keep Credit Utilization Rates at 10-30%Â
Credit utilization rate is the amount a borrower has spent, compared to the maximum limit they were allotted. If a person has a $10,000 credit limit, but keeps their spending on the line at $3,000, their credit utilization rate is 30%, which is ideal in the eyes of creditors, & jumps your score up month-to-month.
 4. Dispute Credit Report ErrorsÂ
Longstanding credit issues from disputable sources shouldn't hinder someone from building their score. Call the credit reporting agencies & uncover any past discrepancies that you may be able to have removed from your credit report altogether. This is a proven tactic by credit building professionals, & the general public.
 5. Handle Accounts in CollectionsÂ
If there are any balances that have gone to collections, whether car-related, hospital bills, attorney fees, etc., try your best to set up a payment plan & chip away until their gone. Ideally, one should pay them off in one fell swoop, & the difference should be visible on a credit report in a month or two.
 6. Get a Secured Credit CardÂ
A secured card is specifically designed to help borrowers build their credit. These tend to have smaller limits, since users are considered more risky than those with large credit limits, but it is a great way to get the ball rolling in the right direction.
 7. Become an Authorized UserÂ
An authorized user is someone who is added to an existing credit card account, but are not responsible for making any payments. The card's history willl appear on your credit report, & if the cardholder is making payments on time, this will boost your score passively.
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