How to Find a Credit Card That Builds Credit Fast: 3 Simple Tips
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Last updated 03/21/2022 by
Ben LuthiIf you’re trying to figure out how to build credit fast, a credit card is one of the best ways to do it. However, some credit cards make it harder to build credit than others.
Below are three key things to look for in a credit card and tips on how to build your credit fast.
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3 tips for finding a credit card that builds credit fast
To help you find the right credit card that builds credit fast, we’ve put together a few tips, as well as what to do once you get your new card.
1. Make sure it reports to all three credit bureaus
The key to finding a credit card that builds credit fast is making sure the creditor reports your card activity to all three credit bureaus. If your card only reports to one or two credit bureaus, it could spell trouble in the future.
For example, let’s say you get a card that reports your activity to TransUnion and Equifax, but not Experian.
In the future, if you want to borrow money and the creditor checks your Experian credit report, it won’t see any information about your credit card account. And if you’ve been working hard to establish a good history with that account, it won’t matter.
Most cards from major issuers report to all three credit bureaus, but others might not. So, be sure to ask before applying.
2. Get a card you can use regularly
Your payment history is the most important factor in your credit score, so getting a card that has limited acceptance can make it hard to use regularly.
Specifically, avoid closed-loop store credit cards that you can only use at that retailer. “Get your first card with a Visa or Mastercard logo for maximum acceptance,” says Mike Sullivan, a personal finance consultant with Take Charge America.
However, you can find store credit cards that you can use outside of the retailer, such as the Costco Anywhere Visa Credit Card.
3. Don’t fall for bad offers
“There are not as many predatory cards as there used to be,” says Sullivan. “But some cards advertise that they are designed to help build credit and often have terrible terms.”
It can be hard to get a credit card with bad or no credit, but there are plenty of options that won’t charge you an arm and a leg to help you build credit fast.
Instead, here are some solid options to consider:
This unsecured credit card is designed for people who are building credit for the first time. It does charge a $39 annual fee, but that might be worth it to you if it means not having to put up a security deposit of $200 or more on a secured credit card.
This is a secured credit card that requires a collateral deposit of at least $200 to get started. But it offers rewards, the possibility of getting your deposit back long before you close the account, and charges no annual fee.
This is the perfect card if you have major negative items on your credit report. It doesn’t require a credit check or even a checking account to get approved. The card has a relatively low interest rate compared with other secured credit cards. However, there is a $35 annual fee to consider.
3 tips for building your credit fast
Once you find the right credit card to help you build your credit, you’ll be able to start establishing a positive payment history. It’s essential at this point to pay off your balance on time and in full to make sure you can build credit without going into debt.
Here are three other things you can do that will help you build credit quickly.
1. Keep your balance low
The second-most important factor in your credit score is how much you owe, and your credit utilization is a big part of that. Your credit utilization is calculated by dividing your balance by your credit limit.
So, if you have a $200 balance on a card with a $500 credit limit, your credit utilization is 40%. Credit experts generally recommend keeping your utilization below 30%, but the lower, the better.
So, if you have a $500 credit limit, try to keep your spending on the card to a minimum.
2. Consider opening a second card
Adding a second card to the mix can help compound the benefits of the good credit habits you’re developing. As lenders see you using more than one account responsibly, it could further boost your creditworthiness.
“Use each one sparingly and pay each off in full immediately after using it,” says Sullivan. “This maximizes your payment history and your credit utilization rate. Doing this with just one card helps, but takes longer.”
If you can manage to get added as an authorized user on a parent’s credit card, that might be even better. As an authorized user, you get the full history of the card on your credit report from day one.
That said, you should only opt for that route if your parent has used the card responsibly.
3. Check your credit report for errors
In 2013, the Federal Trade Commission reported that a quarter of consumers had errors on their credit reports that might hurt their credit scores.
Keep an eye on your credit score and check your credit reports at least once a year through AnnualCreditReport.com to make sure you don’t have any errors.
If you notice something is amiss, take action immediately. Dispute the error with the credit bureaus and contact the creditor directly to get the account removed.
Remember, this works only for legitimate errors. Don’t waste your time trying to get an account removed just because you don’t want it on your credit report.
The bottom line
Compare these cards to get the one with the best terms and commit to paying it off on time so you can gradually qualify for a card with better terms.”
As you get the right card and use it responsibly, you’ll not only build credit fast but also establish good credit habits that will benefit you for a long time.
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Ben Luthi is a personal finance writer and a credit cards expert who loves helping consumers and business owners make better financial decisions. His work has been featured in Time, MarketWatch, Yahoo! Finance, U.S. News & World Report, CNBC, Success Magazine, USA Today, The Huffington Post and many more.
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