Tips to Build Your Credit the Smart Way

Building your credit doesn’t have to feel overwhelming! Here are some easy-to-follow tips, including a few unique strategies you may not have considered:

1. Pay Your Bills on Time
   It sounds simple, but this is the biggest factor in building good credit. Set up automatic payments or reminders so you never miss a due date—on loans, credit cards, or even utility bills.
2. Become an Authorized User
   Ask a family member or close friend with great credit to add you as an authorized user on their credit card. You don’t have to use the card, but their good payment history can help boost your credit score.
3. Keep Your Credit Utilization Low
   Try to use less than 30% of your available credit limit. For example, if your credit card limit is $1,000, aim to keep your balance below $300.
4. Report Your Rent and Utilities
   Many people don’t realize you can have rent and utility payments reported to credit bureaus. Services like Experian Boost or Rental Kharma allow you to get credit for bills you’re already paying.
5. Diversify Your Credit
   If you’ve only used credit cards, consider adding another type of credit, like a small personal loan or a secured loan. Having different types of credit can improve your score over time.
6. Ask for a Credit Limit Increase
   If you’ve had a credit card for a while and have been making payments on time, ask your card issuer for a credit limit increase. A higher limit lowers your credit utilization without needing to spend less.
7. Use a Secured Credit Card
   Secured credit cards require a deposit, but they’re a safe way to build or rebuild credit. Use it like a regular credit card and pay it off in full each month to show responsible credit behavior.
8. Unconventional Tip: Keep Old Accounts Open
   Even if you no longer use an old credit card, keep it open. Closing old accounts can lower your credit age, which might hurt your score. Just make sure there’s no annual fee.
9. Unconventional Tip: Negotiate Your Credit Report
   If you have late payments or negative marks on your credit report, reach out to creditors to negotiate a "goodwill adjustment." Many companies are willing to remove negative marks if you’ve been a loyal customer.
10. Unconventional Tip: Start a Credit Builder Loan
    Some banks and credit unions offer loans designed to help you build credit. You borrow a small amount, but instead of receiving the money upfront, it’s held in a savings account. Once you’ve paid it off, you get the money—and a better credit score!