Building your credit score from 500 to 700 in the first six months is possible, depending on how well you use your credit. A FICO credit score of more than 800 is considered excellent, and it generally takes years to achieve this. To get a credit score from scratch, you need to use credit, such as opening and using a credit card or paying off a loan. It will take about six months of credit activity to establish sufficient history to obtain a FICO credit score, which is used in 90% of credit decisions.FICO credit scores range from 300 to 850, and a score above 700 is considered a good credit score.
It took me about four years to get an excellent credit score of more than 800. Most of this time was spent rehabilitating my student loans and other negative elements of my report. After that, it took less than a year to get my score up to 800.To build your credit score quickly, you can start by opening and using a secured credit card or adding yourself as an authorized user on someone else's card. Make sure to pay your bills on time every month and keep your balance low.
You can also add new types of debt to your profile, such as personal loans or car loans, which will provide you with a healthier credit mix and increase your credit score.You can also opt for rental credit reporting services, such as RentTrack and PayYourRent, which will process the rent payment and report it to the credit bureaus (for a fee, if the landlord is not registered). Demonstrating that you make your payments on time and that you don't have high credit card balances makes you a less risky and more reliable user of credit in the eyes of lenders.The length of your credit history directly affects your FICO score, so the longer your accounts are open, the better your credit score will be. Making too many inquiries on your credit report can be a sign that you're desperately seeking credit and pose a risk to lenders.However, it may not have enough impact to change your credit rating; the size of the impact depends on your current credit history. You can also opt for a new tool offered by the credit agency Experian that includes utility bills, such as your mobile phone and electricity bills, in your credit report and includes them in your score.Every month that you make timely payments by credit card and have no balance on your insured card, your credit score should increase.
Credit card issuers report card balances and payment history to the major credit bureaus every 30 days.If your score is low because you don't have much credit history or you're just starting the process of building your credit, you can expect small changes in your rating from month to month. Major changes in your rating take time. Think of this option as a stepping stone to your next financial tool, whether it's a secured or unsecured loan or a new line of credit.