Achieving and maintaining a good credit score is crucial if you want to apply for a mortgage, car loan, personal loan or credit cards. Lenders will approve more loans if you prove that you are responsible with your debts and show them you aren’t a risk by having a good credit score. What is a good credit score? In this article we will discuss what a good credit score is and how you get a good credit score fast.
Do you have a good credit score?
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A score of 661-780 is considered good credit. However, your credit score will be different depending up which scoring model you are looking at the FICO Score or Vantage Score.
A good FICO score is 661-780.
A good Vantage Score is 700-749.
Most major lenders in America use the FICO to determine your creditworthiness but some places use the Vantage Score such as Credit Karma, so it is important to know and monitor both of these credit scores.
Related: Credit Karma vs FICO Score
How fast can you get a good credit score?
If you have no credit or bad credit, building your credit score can take anywhere from a month or two to up to six months. Your Vantage Score can be built up just within a couple of months as they calculate their score differently than your FICO Score. Your FICO Score can take up to six months to generate a good credit score.
The main factor of your Vantage Score is payment history, so if you’re paying your bills on time monthly this should increase your score. The second main factor of your Vantage Score is Age and Type of Credit, lenders typically like to look at how long you have different types of accounts open and if you have a good mix of credit such as credit cards and student loans or auto loans that’s a bonus.
The Main factor of your FICO Score is also payment history. Make sure you are paying your bills on time every month. The second main factor of your FICO Score is outstanding debt which makes up 30% of your credit score. The goal here is to keep your debt low. Try to pay down your credit card bills or your loans.
Related: How To Pay Down Your Credit Cards
How can I build my credit fast?
You can build your credit fast by doing a few easy things. One way to build your credit fast is to increase your credit limits. You can do this by opening up new credit cards, increasing your credit card limits or apply for loan. While these might lower your credit a couple of points momentarily it will increase your credit fast.
If you don’t have a long credit history you can build your credit fast by being an authorized user on someone else’s account. You can ask your family or friends that have had accounts open for a long time to add you as an authorized user so you can reap the benefits of their good credit.
Another way you can increase your credit history is to buy a tradeline, which is another way you can be added as an authorized user. When you buy a tradeline, you are buying someone’s payment history for a long-standing credit card that has very little debt on it. This will greatly increase your credit score. You can buy tradelines through Tradeline Supply Co.
Related: What Are Tradelines?
How do I get my credit score up to 100 points in one month?
In order to increase your credit score in a short period of time you first need to look at your credit report to see what areas you need to work on. If you find errors or items on your credit report that should no longer be there you can dispute these items and get them removed off your credit report. Once items are disputed from your credit report such as late payments, collections, credit inquiries, and bankruptcies you can increase your credit score up to 100 points.
What are 5 things you can do to get good credit Score?
Pay Your Bills On-Time
The MOST important thing you do to get good credit is to pay your bills on time every single month. Payment history makes up 35% of your FICO Score and 40% of your Vantage Score. With this being the highest percentage for both credit models making sure you don’t miss any payments is crucial. These payments include any accounts you have open such as credit cards, auto loans, personal loans, business loans, mortgages, and student loans.
Get Credit For Paying Your Bills
Did you know that you can credit for paying your bills on time every month? If you use Netflix, Hulu, AT&T or pay your rent every month on time, you can report these payments to the credit bureaus to increase your credit score. To get credit for paying your bills you can use Experian Boost to link your accounts and they will report these payments to the credit bureau. The second way to increase your payment is through rent. There are several apps and programs such as RentReporters you can use that will report your on-time rent to the credit bureaus.
Dispute Credit Reports
If you have any missed payments, credit accounts that have gone to collections, bankruptcies, or too many credit inquiries on your credit report, you might be able to dispute these items. In order to dispute these items, you must have proof that there is a mistake and send in this proof with your dispute letters to the three major credit bureaus. The credit bureaus will then investigate the error on your behalf and if they agree with you, they will instantly remove that item from your credit report.
Keep Your Credit Accounts Open
What do you do when you stop using a credit card? Do you keep it in your wallet? Cut it up and throw it away? Or close the credit card? If you answered yes to close the credit card you are lowing your credit score by doing so. It is extremely important to keep all your credit card accounts open because when you close that account you lose all of your credit history with that account. That means you lose the length of your credit history, the credit limit, and the on time payments.
The best way to keep a credit card open that you no longer want to use the set it and forget model. Pick one monthly subscription service that you use, such as Netflix or Hulu, and use this credit card to make those monthly payments. Set up automatic payments for this monthly bill and you won’t need to worry about the credit card company closing down your card because you no longer use it. If you have a credit card with annual fees that you no longer want to keep consider using it enough to pay the yearly fee in rewards or points, or see if they will waive the fee for you.
Mix Up Your Credit Accounts
To build a good credit score you need to have multiple accounts open. Lenders will look at your credit to see if you can make your payments on time, you have low debt and you to see if you have a good mix of credit accounts. Lenders love to see a good mix of credit accounts because it shows you are well-rounded and have the ability to pay any debt you have. A good credit mix will consist of having credit cards and revolving credit accounts that include auto loans, personal loans, construction loans, mortgages, and student loans. If you only have one type of credit consider opening up a new line of credit. If you only have student loans try opening up a credit card. Even if you have no credit or bad credit, you can still get approved for a credit card.
Related: Best Credit Cards For Bad Credit
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