It takes a long time to get an excellent credit score – a FICO score between 800 and 850 – and there are a number of ways you can improve your credit more quickly. If you’re starting from scratch, however, it’s going to take you longer because you have to build a credit history.
Credit Score Basics
Before we get into how to build your credit fast, let’s explain credit scores. Most lenders look at your FICO credit score, which is the most common type of scoring model.
- Payment history: 35%
- Amounts owed: 30%
- Length of credit history: 15%
- New credit: 10%
- Credit mix: 10%
According to FICO, in order to get a score, you need to have at least one account open for at least six months, and it must be reported to the credit bureaus.
Different Ways to Improve Your Credit Score
How can you raise your credit score fast? Let’s look at how you can do this by narrowing things down to the different factors that make up your FICO score:
- Payment history – Each factor plays a role in determining what your FICO score is, but the biggest one is payment history. If you’ve been on top of your monthly payments and don't miss any, you should see your credit score rise over time. If you miss a payment, or frequently miss payments, your score is going to drop.
- Amounts owed – The second biggest section is amounts owed, also known as how much debt you have. You should try to pay off all credit card balances, or keep them as low as possible. Having a credit utilization ratio (what you owe on credit cards compared to your credit limits) that’s under 30% is good for your credit score; anything above that could negatively impact it.
- Credit history, new credit, and credit mix – The last three sections total 35% of your overall FICO score. Although these are the smallest factors, you shouldn’t overlook them. Adding new credit, no matter whether it's installment credit (auto loans, mortgages) or revolving credit (credit cards), keeping these accounts open, and paying on them responsibly is a surefire way to raise your score.
Another thing you can do is clean up your credit reports. Sometimes, errors or inaccurate information can make their way onto your reports, which therefore brings down your credit score. You can do this on your own by disputing them with the reporting credit bureau, or enlisting the help of a credit repair service.
Adding an Auto Loan to Your Credit Mix
One way to improve your credit score as quickly as possible is by adding a car loan. Not only do you get a vehicle, you get the benefit of adding a new line of credit to your credit mix. Even better news is that you don’t need great credit to qualify for an auto loan. You just need to find the right lender to work with, and we can help with that.
At Auto Credit Express, we work with dealerships all over the country that know how to handle complicated credit situations. We've been helping consumers get connected to special finance dealers near them for over 20 years. Fill out our car loan request form, and we’ll get right to work matching you with a local dealership!