How to Build Up a Credit Score Quickly

Building a strong credit history can be very difficult for those who are starting out from scratch. It can take several years for some people to build a reputable credit score, but the need for a high credit score has never been more present than in today’s society. There are however ways to expedite the process of improving credit history, without having to wait several years to do so.

Establishing Credit with Prepaid Cards

One of the best ways to begin establishing credit is to apply for a prepaid credit card. Although most prepaid credit cards do not report credit history information, and are useless for building a credit score, there are some that will provide credit bureau reporting for an additional fee. Whenever credit information is reported to credit bureaus it can affect the credit score of the cardholder. Consistently loading a prepaid card and making purchases with it for about a year should give one the chance to establish a decent credit score.

Building a Good Credit Score with Unsecured Credit Cards

Once credit has been established with a prepaid card, the cardholder can then begin building a good credit score using unsecured credit cards. Unsecured credit cards are simply conventional credit cards that come with a specific credit limit and do not require a prepayment. Sometimes it is possible to be denied for a conventional credit card even after establishing credit with a prepaid card. If this is the case it may be beneficial to apply for a merchant credit card instead. Merchant credit cards can only be used in specific stores, however they give the cardholders a chance to build their credit score even further. Merchant cards have a very lenient approval process, so they are perfect for people trying to build a credit history.

Using a Savings Account to Get Accepted for Loans

A good way to get accepted for a loan is to set up a savings account and make regular deposits into the account. This generally makes it easier to be approved for a conventional credit card. Since the card issuer can check into the applicants savings history. Many card issuers will see a solid savings history as a sign of consistent financial stability. While the savings history of a savings account is not going to be shown in a credit report, it can be used as a reference on a loan application. Being accepted for a car loan presents another opportunity to build a credit history, as the payment history of the loan will be added to the credit history of the loan applicant. Using the above methods and making monthly payments on time can make it easy for anyone to build up a solid credit history within about a year’s time.