How to Improve Your Credit Fast - Part 2

There may be ways to build your credit fast if your score is lower than you'd like. Depending on what's holding it down, you may be able to tack on as many as 100 points relatively quickly.

Scores in the “fair" (630-689) and "bad" (300-629) areas of the credit score ranges could see dramatic results.

Is 100 points realistic?

If you’re struggling with a low score, you’re better positioned to make gains quickly than someone with a strong credit history. Is a 100-point increase realistic? Rod Griffin, senior director of public education and advocacy for credit bureau Experian, says yes. “The lower a person’s score, the more likely they are to achieve a 100-point increase,” he says. “That’s simply because there is much more upside, and small changes can result in greater score increases.”

Last week, we looked at the following strategies:

1. Pay credit card balances strategically

2. Ask for higher credit limits

3. Become an authorized user

4. Pay Bills On Time

Here are more strategies:

5. Dispute credit report errors

A mistake on one of your credit reports could be pulling down your score. Disputing errors on your credit report can help you quickly improve your credit. You're entitled to free reports from each of the three major credit bureaus. Use AnnualCreditReport.com to request them and then check for mistakes, such as payments marked late when you paid on time, someone else's credit activity mixed with yours, or negative information that’s too old to be listed anymore. Once you've identified them, dispute credit report errors.

Impact: Varies, but may be high if it is reporting that you missed a payment and you didn't.

Time commitment: Medium to high. It takes some time to request and read your free credit reports, dispute errors and track the follow-up. But the process is worthwhile, especially if you're trying to build your credit ahead of a milestone such as applying for a large loan. If you're planning to apply for a mortgage, get disputes done with plenty of time to spare.

How fast it could work: Varies. The credit bureaus have 30 days to investigate and respond. Some companies offer to dispute errors and quickly improve your credit, but use caution.

6. Deal with collections accounts

Paying off a collections account removes the threat that you will be sued over the debt, and you may be able to persuade the collection agency to stop reporting the debt once you pay it. You can also remove collections accounts from your credit reports if they aren't accurate or are too old to be listed.

Impact: Varies. An account in collections is a serious negative mark on your credit report, so if the collector agrees to stop reporting the account it could help a great deal. If the collector keeps reporting the account, the effect depends on the scoring model used to create your score. The FICO 8 model, which is most widely used for credit decisions, still takes paid collections into account. However, more recent FICO models and VantageScores ignore paid-off collections.

Time commitment: Medium. You'll need to request and read your credit reports, then make a plan to handle collections accounts that are listed.

How fast it could work: Moderately quickly. On credit scores that ignore paid collections, such as VantageScore and newer FICOs, as soon as the paid-off status is reported to credit bureaus it can benefit your scores. In other cases, such as disputing a collection account or asking for a goodwill deletion, the process could take a few months.

7. Use a secured credit card

Another way to build or rebuild your credit is with a secured credit card. This type of card is backed by a cash deposit. You pay it upfront and the deposit amount is usually the same as your credit limit. Then, you use it like a normal credit card, and your on-time payments help build your credit.

Impact: Varies. This is most likely to help someone new to credit with accounts or someone with dented credit wanting a way to add more positive credit history and dilute past missteps.

Time commitment: Medium. Look for a secured card that reports your credit activity to all three major credit bureaus. You may also consider looking into alternative credit cards that don't require a security deposit.

How fast it could work: Several months. The goal here is not just having another card, although that can help your score a bit by improving your depth of credit. Rather, your aim is to build a record of keeping balances low and paying on time.

8. Get credit for rent and utility payments

Rent reporting services can add your on-time rent payments to your credit reports. Rent payments are not considered by every scoring model — VantageScores include them but FICO 8 does not, for example. Even so, if a would-be creditor looks at your reports, rent records will be there, and a long record of consistent payments can only help. Experian Boost may also help. You link bank accounts to the free Boost service, which then scans for payments to streaming services, phone and utility bills as well as eligible rent payments. You choose which payments you want added to your Experian credit report. If a creditor pulls your FICO 8 using Experian data, you get the benefit of that additional payment history.

Impact: Varies.

Time commitment: Low. After initial setup, no additional time is needed.

How fast it could work: Boost works instantly, but the rent reporting aspect of it, as with rent reporting services, will vary based on a consumer's history. For example, some services offer an instant "lookback" of the past two years of payments, but without that, it could take some months to build a record of on-time payments.

9. Add to your credit mix

An additional credit account in good standing may help your credit, particularly if it is a type of credit you don't already have. If you have only credit cards, consider getting a loan; a credit-builder loan can be a low-cost option. Check that the loan you're considering adding reports to all three credit bureaus. If you have only loans or have few credit cards, a new credit card may help. In addition to improving credit mix, it can reduce your overall credit utilization by providing more available credit.

Impact: Varies. Opening a loan account is likeliest to help someone with only credit cards and vice versa. And there's more potential gain for people with few accounts or short credit histories.

Time commitment: Medium. 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, too, if you're getting a loan or card strictly to improve your credit.

How fast it could work: Fast. As soon as the new account's activity is reported to the credit bureaus, it can start to benefit you.

(Partially Reprinted from www.nerdwallet.com)