How to Build Credit Fast

Do you know how to build credit fast? Did you know there is a right and wrong way to build credit? You need to have a strategy to get the maximum benefit from your credit portfolio. There are two schools of thought on the best way to build credit. I call them the old school and new school strategies.

Old School Strategy

The old school strategy for building credit is the way your parents probably taught you. First, you would get yourself a job, so you could pay off any credit balances you would eventually build up. Then, you open a checking and savings account and place a portion of each paycheck into each. Finally, you’d start building credit by applying for either a secure credit card or a store credit card.

A secured credit card is kind of like a debit card, except that it reports to the credit bureaus. You have to put money in your account before you can spend it. There is no real “credit” extended, but it does show a payment history.

Store credit cards are generally easier to get approved for if you have a thin credit history. Those lenders are willing to take larger risks because they will charge you among the highest interest rates possible. They’ll start you with a low credit limit of $150 -$300.

Over time, you will establish yourself as a low credit risk by showing a timely payment history and be able to apply for credit limit increases every 6 months or so. As your credit limits begin to increase you will eventually start receiving other credit offers.

For best results, you should include a mix of fixed loans in your credit portfolio. Generally speaking, one loan for every 3-5 credit cards works best. Loans could include car financing, personal loans, or mortgages.

New School Strategy

If you’re in a rush, or live in the real world like I do, then the real world strategy is more your speed.

Your FICO score is designed to determine your level of risk as a borrower to a potential lender. If your credit is new, that is a warning sign to a lender. N o one wants to be the first to give you credit. You can instantly add age to your credit report by becoming an authorized user.

An authorized user is a person who may use another person or business’ credit card account, but is not liable for the balance or payments. They are commonly used with businesses as expense accounts. for example, if you worked for a construction company and your job was to buy the supplies, the company would probably give you an authorized user account to make your purchases.

When you are an authorized user, the credit history of the accoutn is reported on your account as well.  Due to changes in FICO08 the benefits of an authorized user account are realized only if FICO can verify there is a legitamite purpose to the account, such as a professional or personal relationship.

Typically, your parents can help you establish your credit by adding you as an authorized user. You now instantly have age and history.

Adding one account with age is great, but a lender will still see you as a risk since you only have one account. A second account for a few hundred dollars would be helpful, but not ideal. Instead I would recommend obtaining a card with a high limit, like those available at

With a 100% approval rate you can instantly add a second card with a $5,000 limit. Now your credit will show two sizable accounts with high limits and low balances. Any lender would be willing to give you a great deal on another card or loan. From their point of view you are the ideal customer and you built your credit in less than 60 days.