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If you want to establish good credit or repair a bad history, keep in mind that this will take three to six months once you acquire and apply good habits.. Here are three ways you can improve your credit score.
1. Get a loan to build credit
The purpose of a credit building loan is to help people with little or no credit history establish credit..
With this loan, the money you borrow is in the lender’s bank account. You will make monthly principal and interest payments, which the bank then reports to the credit bureaus.
Once you pay off the loan in full over a specified period, usually between six and 24 months, you’ll establish a positive payment history by making your payments on time each month, which can help you build credit, CBS News reported.
2. Get a cosigner on a loan
Your payment history greatly influences your credit score. Opening a personal loan, car loan, or other installment loan and making payments on time can significantly affect your credit score.
If you can’t qualify for a loan on your own, consider hiring a cosigner with good credit. A cosigner can help you qualify for a loan by getting better interest rates and terms.
Of course, you’ll want to make sure the cosigner understands that the bank will expect him to take financial responsibility for the loan if you don’t make the payments.
3. Become an authorized user
Another effective way to improve your credit is to become an authorized user on a friend or family member’s credit card account..
You will be authorized to make purchases with the card, although you do not need to have a card to benefit from it. As long as you pay your monthly credit card bill on time, your payment history and credit score can go from strength to strength.
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