Posted by: John S Kiernan

It doesn’t take long to build credit, at least in the sense of building enough credit history for a credit score to be generated. The newest credit scores can produce a rating for anyone with a loan or line of credit. That includes the VantageScore 3.0 credit scores you can get for free from WalletHub. And since creditors report account information to the major credit bureaus on a monthly basis, you can build a credit score in as little as a month.

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With that being said, building a consistently excellent credit score is a multi-year process. And there are no shortcuts. But there are some steps that you can take to ensure credit building doesn’t take any longer than it has to.

Here are the fastest ways to build credit and begin enjoying the spoils of a good or excellent score:

1. Become an Authorized User

Asking a financially responsible family member to make you an authorized user on their credit card account is a great way to build credit when you’re too young to qualify for your own account. And it can help everyone else supercharge their current credit-building efforts.

Basically, you’ll be piggybacking on that person’s established credit standing. Their spending limit will inflate your available credit. And their on-time payments will add positive information to your credit reports on a monthly basis, as long as those payments are on time.

Plus, authorized users aren’t responsible for unpaid bills or any misuse of the account. And you can easily get negative records about an account you are/were an authorized user on removed from your credit report by asking the credit bureau to do so.

2. Get Your Own Credit Card ASAP

Credit cards are the best credit-building tools available to us. They report account activity to the major credit bureaus on a monthly basis, which allows cardholders to build a track record of responsibility. And they don’t require you to incur any debt or pay a fee.

All you have to do to build credit with a credit card is pay your bill on time each month and maintain reasonable credit utilization. You don’t even have to make purchases to build credit with a credit card, if you don’t trust yourself not to overspend. Simply having an open credit card with no balance will result in credit-score improvement. Just bear in mind that the issuer could close your account after a prolonged period of inactivity. And that could hurt your credit standing if it’s the oldest account on your credit report.

So even if you have to place a refundable security deposit on a secured card, it’s essential to get yourself some plastic as soon as possible. The only time you should think twice about doing so is if you plan on applying for a mortgage or auto loan in the next three months. Opening a new credit card causes your credit score to dip a bit temporarily, which could cost you if timed poorly.

Get a Personalized Credit Card Recommendation – 100% Free 3. Ask for a Higher Spending Limit

A higher credit limit can improve your credit utilization ratio and thus your credit score. You just need to make sure you don’t spend more because of it. You should also be aware that most lenders will not increase your limit until you’ve made at least six consecutive on-time payments.

In addition, your creditor may have to re-check your credit to evaluate your request for a higher limit. And that may result in a hard inquiry on your credit report, which could ding your score a few points.

Not-So-Fast Credit Building Tips

Credit improvement is like a science experiment or marathon training. The best results are the product of a well-executed plan, careful monitoring and purposeful adjustments. But instead of beakers and stopwatches, the tools of the trade are your budget, monthly credit-card statements, credit report and credit score.

Keeping tabs on this information will help you stay on task and avoid wasting time. And you can easily track your credit on WalletHub, the only site with free credit scores and reports that are updated on a daily basis.

Get Your Free Credit Score

As you sprint toward Top WalletFitness®, make sure not to get so caught up in short-term gains that you loose sight of the bigger picture. Your goal should be to not only get excellent credit but keep it. And taking the following tips to heart will help.

• Be Patient – The length of your credit history accounts for about 15% of your overall credit score. That’s significant, but it shouldn’t force you to play the waiting game. It’s possible to build a good or excellent credit score in a matter of months, after all. You just have to continue borrowing responsibly to keep it up.So focus on the other 85%. If you concentrate on what you can control, time will take care of itself.

• Add to Your Credit Mix – The types of credit that you’ve used — credit cards, auto loans and mortgages, for example — account for at least 10% of your credit score. And it usually takes young people a while to score highly in this regard, considering that the median American doesn’t get a mortgage until age 33.But that’s all right. It’s certainly possible to build excellent credit before buying a house or a car. And the goal is to prove yourself capable of borrowing responsibly with different types of financial products, not to make mistakes in haste.

Finally, it’s important to acknowledge that not everyone is building credit from scratch. If you’re working your way back from damaged credit, make sure to check out WalletHub’s tips on how to rebuild your credit and the steps you can take to speed things up.

For more great advice, check out WalletHub’s overall credit-improvement tips.

Ask the Experts: Making Good Credit Time

For more insight into the credit-building timeline and what you can do to speed it up, we asked a panel of personal finance experts to share their thoughts on the following questions. See who they are and what they had to say, below.

• Are there any legitimate ways to speed up the credit-building process?
• Does good credit only come to those who wait?
• What is the biggest mistake that people make when trying to build credit fast?

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• Brian Winrow Associate Professor of Accounting at Winona State University
• John C. Lopez Clinical Assistant Professor of Personal Financial Planning and Director of the CFP® Board Registered Program in the Bauer College of Business at the University of Houston
• Meeghan Rogers Assistant Professor of Finance in the School of Business at Farmingdale State College
• Howard Davidoff Professor of Business Management at Brooklyn College
• Zack McNeil Business Instructor at Metropolitan Community College of Kansas City
• Jeffrey Phillips Visiting Assistant Professor of Business Administration at Colby-Sawyer College
• Axton Betz-Hamilton Assistant Professor of Consumer Affairs, Department of Consumer Sciences, South Dakota State University

Brian Winrow Associate Professor of Accounting at Winona State University Are there any legitimate ways to speed up the credit-building process? The best way to expedite the credit-building process is to be proactive in the process and to serve as your own advocate. First, take advantage of your free credit reports to search for any mistakes that may appear on your report, including making sure that any adverse actions have been removed from your report after the designated timeframe. Correcting these reports can have a quick impact on restoring credit, which can facilitate other methods to speed up the credit building process. After reviewing the credit report for accuracy, there are additional measures that can be employed to expedite the credit-building process. For example, credit cards can be beneficial when it comes to building credit, and may even provide an immediate return on purchases. There are even some credit cards which offer up to a 2% cash back on purchases, without charging an annual fee. By using the card for everyday purchases and paying off the entire balance each month, you will quickly build credit, while also earning a small return on these expenditures. If using this approach, discipline is key, as missing payments can results in the repayment at high interest rates, while also diminishing your credit. Does good credit only come to those who wait? Credit occupies a central role in society, directly impacting your financial station in life. In addition to impacting whether credit will be extended to a borrower and the accompanying interest rate one receives, it is often used for housing decisions (rental or purchasing a home), as well as throughout the employment decision making process. As such, it is important to be aware of your credit, and to take the necessary measures to grow it at a young age to secure the best terms possible. This can be accomplished by maintaining a budget, being disciplined when using credit, and avoiding overextending your credit. What is the biggest mistake that people make when trying to build credit fast? It takes discipline to build credit. Most credit-building techniques are initiated with the best of intentions. The use of credit cards and access to securing products or services for immediate gratification can be a challenge for both experienced and inexperienced consumers. There can be a feeling of empowerment knowing you have the immediate means to purchase a luxury item, minimizing the financial burden it will cause as you seek to pay off the credit card. As a result, credit can quickly cause financial distress, damaging credit for years to come. I have seen instances whereby well-meaning parents have added a child to their credit card as an authorized user, helping to initiate the credit-building process at a young age. Unfortunately, the parents ended up in financial distress, adversely impacting the child’s credit. The cautionary narrative should reinforce the importance of being your own advocate, and ensuring you remain in control of decisions that can impact your credit. John C. Lopez Clinical Assistant Professor of Personal Financial Planning and Director of the CFP® Board Registered Program in the Bauer College of Business at the University of Houston Are there any legitimate ways to speed up the credit-building process? The best way to build credit is to apply for a credit card, use it and pay off the entire balance each month. Within 6 months, you have built a good credit history. Does good credit only come to those who wait? No, one should begin to build a credit history as soon as one has income to pay off any debt. What is the biggest mistake that people make when trying to build credit fast? Getting into too much debt. When beginning to build credit, one should only charge what one can pay off at the end of the month. Meeghan Rogers Assistant Professor of Finance in the School of Business at Farmingdale State College Are there any legitimate ways to speed up the credit-building process? If you are looking to better your credit score and do so quickly, there are a few easy steps you can take to help. First, you should pay any outstanding and past-due accounts right away, as these accounts will have a negative impact on your credit score. Once you are able to take care of the accounts that are past due, you can focus your energy on paying your other accounts on time. The best way to help with this is automatic payments. If you find that you are often paying bills late, an easy fix would be to have that amount directly taken out of your account and applied to the bill. This will help ensure that you will not have any past-due accounts and that you are not spending money on other things before you get around to paying your bill. If you are not an over-spender, then there is another way to build up your credit. You can extend your credit limit on an existing credit card. Your credit score depends on the amount of credit you are using versus the amount of credit you could use. If you have a larger credit limit but keep up with paying off your card, then this will increase your credit score. It is also usually easier to increase your existing card’s credit limit than opening a new credit card. Does good credit only come to those who wait? The old idiom of “good things come to those who wait” does not apply to your credit score. While it may take a long time to reverse any major damage to your credit score, not doing anything and waiting for your score to improve by itself will not help. Excellent credit scores usually take up to seven years of open accounts and timely payments. However, taking actions to stop the behaviors that got you into the mess will help prevent something hurting your credit in the future. Keeping up with your timely payments and not letting your balance continue to increase will ensure that your credit will continue to rise over time. What is the biggest mistake that people make when trying to build credit fast? The number one mistake people make when trying to build credit is to close a credit card account. This may seem counterintuitive, but it can actually hurt your credit score to do this. In the short run, having a credit card with a zero balance will have a positive effect on your score. This ties into the ways to build your credit discussed above, where I suggest extending your credit limit to help your score. If you have a credit card account with a zero-dollar balance, this will indicate that you have a large amount of credit that you could use compared to what you actually are using, thus improving your score. Your credit also improves with the length of time the card is open, so having a dormant card continues to build your good credit, even if you don’t use it and the balance remains at zero. Howard Davidoff Professor of Business Management at Brooklyn College Are there any legitimate ways to speed up the credit-building process? Some of the recommended methods to start building credit as soon as possible include:

• Obtaining a secured credit card. These work substantially the same as the traditional, unsecured credit cards, except that you must make a “security deposit” with the issuer in the amount of the credit line afforded you. In this way, the issuer is assured of repayment, as it will hold your deposit as collateral against your credit card purchases. Citibank, Discover, Bank of America, Capital One and many credit unions offer this option to those who are having trouble obtaining a traditional credit card.

• Becoming an authorized user on another’s credit card. In the event that you cannot get the funds for a security deposit, it might be an option to have your name added to someone else’s card. Many card issuers report authorized users to the credit agencies. Most major issuers, including American Express, Bank of America, Capital One, Chase, Citi and Wells Fargo will report to all three of the major credit bureaus.

• Apply for a credit builder loan. These specific types of small loans are designed to help those starting out or who need to reestablish credit. The loans generally range from $500 to $1,500, and the “loaned” amount is generally deposited directly into a savings account until fully repaid by the borrower. The loans generally do not extend past a two-year period and once the loan is repaid with interest, the deposited funds are released to the borrower creating a forced savings. This should start showing up on your credit score in about six months. Remember not to prepay this loan, as the longer the term of repayment, the more your credit score will be enhanced. Of course, you must make your payments on time.

• Take out a loan or unsecured credit card with a cosigner. This way, the creditworthiness of the cosigner will make it possible for you to be the primary borrower, since the cosigner will assume equal responsibility for the repayment of the loan or card.

• If you already have credit cards, you may be able to increase your score by getting the credit line increased while not increasing the credit card balance. In this way, your “loan-to-limit” ratios will decrease, thereby increasing your credit score.

• Lastly, you may be able to take a bill, such as your rent or utility bill and have an agency report your payment to the agencies. Rent reporting services such as RentTrack or Rental Kharma may be able to do this for you for a relatively modest fee.

Does good credit only come to those who wait? There really is no overnight way to obtain good credit. Paying your bills on time, keeping your loan-to-limit ratios low, having a variety of different types of credit and a long credit history is the best way to insure a superior credit score. What is the biggest mistake that people make when trying to build credit fast? Opening too many lines of credit too quickly can have disastrous unintended consequences on a credit score. One should also constantly monitor their score for any errors that might occur. On the other hand, closing down lines of credit may also hurt your length of credit history. Also, keep your credit inquiries to a minimum. Zack McNeil Business Instructor at Metropolitan Community College of Kansas City

Are there any legitimate ways to speed up the credit-building process?

Pay off debt obligations as quickly as possible. The faster consumers can lower their debt-to-income ratio, the faster their credit score will improve.

Does good credit only come to those who wait?

Consumers cannot improve their credit score overnight. However, they play a critical role in how quickly their score improves. Report credit report inaccuracies to the credit bureaus to be removed, and pay down debt obligations as quickly as possible to improve your debt-to-income ratio.

What is the biggest mistake that people make when trying to build credit fast?

Some of the most common mistakes consumers make when trying to improve their credit include opening new accounts, increasing credit limits and transferring debt.

Jeffrey Phillips Visiting Assistant Professor of Business Administration at Colby-Sawyer College

Are there any legitimate ways to speed up the credit-building process?

FICO credit scores are widely used today and generally range from 350 to 850 -- the higher your number, the better. Building credit does take time, but any type of credit should help in the process. Ideally, your number should be at least 700. It’s important to always pay your bills on time, and not to take on too much debt.

Does good credit only come to those who wait?

Again, it does take some time to establish credit, especially when you’re starting out. You can begin with a small credit card, charge something on it every month, and pay off the balance in full. A car loan is another way to build credit over time. Many people today have student loans, which will also influence your credit score. It’s also a good idea not to close old credit cards that you don’t use anymore -- just leave the account open, so that won’t negatively affect your score.

What is the biggest mistake that people make when trying to build credit fast?

You must be patient and not overextend yourself financially. Don’t open up too many new accounts at once. It’s beneficial to utilize different types of credit, such as revolving credit (credit cards), as well as installment credit (a car loan or mortgage). Just remember to be smart with your money by paying all your debts on time, never carrying credit card balances, and living below your means. These are the keys to a happy financial life.

Axton Betz-Hamilton Assistant Professor of Consumer Affairs, Department of Consumer Sciences, South Dakota State University

Are there any legitimate ways to speed up the credit-building process?

No.

Does good credit only come to those who wait?

No. The largest component of your credit score is your payment history. Consistently paying your credit obligations on time is the best way to raise your credit score. Length of credit history is a much smaller component of your credit score than payment history.

What is the biggest mistake that people make when trying to build credit fast?

The biggest mistake is applying for too many lines of credit too quickly. Each time you apply for credit, a hard inquiry is reported on your credit report. Hard inquiries stay on your credit report for two years and can negatively impact your score.

Image: KeithBishop / iStock.

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