Your credit score can affect many areas of your life.
A poor credit score can make it harder to buy a car, get a job, purchase a home, rent an apartment, have the utilities turned on, and even get a cell phone.
It can also cost you money, since credit card companies and lenders typically consider your credit score when determining your interest rate.
Fortunately, if your credit is less-than stellar–or you haven’t yet had a chance to establish much, or any, credit history–there are some simple steps you can take to build or boost your score quickly.
While you can’t typically establish exceptional credit overnight, you may be able to improve your credit score in a matter of months by putting a few good credit habits into practice, building a positive payment history, and avoiding credit-damaging mistakes.
Simple Steps to Build Your Credit Faster
Here are some strategies that can help you establish or improve your credit profile ASAP.
1. Understanding What Goes Into Your Score
One of the most commonly used credit scoring models is the FICO® Score .
FICO has five factors it considers when calculating its credit scores.
• Payment history: 35% of this score is related to your history of payments on credit cards, student loans, mortgages, and other loans. The algorithm looks at the frequency and severity of missed and late payments.
• Credit utilization: 30% of this score is based on how much of your available credit you are currently using.
• Length of credit history: The amount of time you’ve had each credit account open makes up 15% of this credit score. That’s why it’s nearly impossible to have perfect credit when you’re new to credit.
• New credit: 10% of this credit score has to do with opening new credit. (However, opening several new credit accounts at the same time isn’t typically a good way to bump up your score, because that can look like you’re in financial trouble).
• Credit mix: The final 10% of this credit score is based on the different types of credit you have and how you’ve managed them.
2. Checking Your Credit Report and Disputing any Errors
Credit scores are calculated on the information in your credit reports.
According to the Consumer Financial Protection Bureau (CFPB), one in five people have an error on at least one of their credit reports.
Everyone is entitled to see their credit reports for free once a year at the government-mandated AnnualCreditReport.com site.
When you get your reports, it’s a good idea to comb through them carefully and to look for any inaccuracies, such as payments marked late when you paid on time, wrong account numbers, incorrect loan balances, or accounts that aren’t yours.
If you find an error in one or all your credit reports, you can reach out to the credit bureaus directly to dispute the information.
If you see accounts in your name that you never opened, and believe you may be a victim of identity theft, you can report it to the Federal Trade Commission at IdentityTheft.gov or 877-438-4338.
A mistake on one of your credit reports could be pulling down your score. Fixing it can help you quickly repair your credit.
3. Paying Bills on Time Every Time
Payment history is the single most important factor that affects your credit scores.
Not only that, a past due payment can stay on your report for seven years.
Setting up autopay, either through each provider or company, or through your financial institution, can be a great way to ensure you never miss a bill.
If you do miss a payment by a few days, all is not necessarily lost, however.
There is generally a small window of time to make up a missed credit card payment before any damage to your credit happens.
That’s because late payments are typically not reported to credit bureaus until the payment is at least 30 days late.
The key is to get it in as soon as you can.
4. Becoming an Authorized User on a Credit Card
If you have no credit or a low credit score, you may be able to build it up by becoming an authorized user of a credit card that the cardholder uses responsibly.
An authorized user has permission to use an account, but does not have any liability for debts.
If a friend or family member adds you as an authorized user to their account, the card issuer will then typically report you as an authorized user to the credit reporting companies.
In this way, you gain a credit history from the credit usage of your friend or family member.
5. Opening a Secured Credit Card
Some credit card companies offer “secured” credit cards, which allow you to build credit history with little risk to the credit card company.
Here’s how it works: You pay a cash deposit up front that is equal to the limit of the card. For example, if you put down a $500 deposit, you would have a $500 limit on the card.
You can then use it like a regular credit card.
Using the secured card responsibly–being mindful of the amount you’ve charged in relation to the card’s limit–and paying your bills in full and on time will all be reported to the credit bureaus.
6. Using your credit card regularly
One way to build credit is to display a history of responsible borrowing.
For that reason, you may want to place monthly bills and other expenses on your credit card–being sure to pay the bill in full each month by the due date.
7. Keeping Credit Card Balances Low
This can help move the needle on credit utilization, or the amount of debt you have compared to the total amount of credit that is available to you, and is expressed as a percentage.
After payment history, this is typically the second most important factor that influences your score.
The rule of thumb is to use no more than 30% of your total credit at any time. This includes access to all credit lines, as well as the percentage on individual cards.
One way to do this is make multiple payments on your credit card throughout the month.
If you’re able to keep your utilization low, instead of letting it build toward a payment due date, it could quickly benefit your score.
8. Keeping Credit Cards Open
It might seem to make good financial sense to close credit cards you never or seldom use.
But from a credit score perspective, it may not be a wise move.
That’s because closing a credit card means you lose that card’s credit limit when your overall credit utilization is calculated, which can lower your credit score.
A better bet might be to keep the card open and to use it occasionally so the issuer won’t close it.
A credit score in the good to excellent range could provide you access to the most competitive interest rates for loans and credit cards, and also make it easier to rent an apartment, get a cell phone, and land a new job.
Some ways to improve your score quickly include having active open accounts that you are consistently paying on time, keeping your loan balances low, and disputing any errors on your credit reports.
Building good credit is also a matter of establishing good financial habits, such as tracking your spending (so you don’t come up short at the end of the month), and make sure all of your bills are posted by their due dates.
One move that can help you stay on top of your finances is signing up for SoFi Money®.
SoFi Money is a cash management account that allows you to earn competitive interest, spend, and save–all in one account. And you’ll pay zero account fees to do it.
SoFi Money also allows you to track your weekly spending right from the dashboard in the SoFi Money app.
You can also use the app to set up all of your bill payments to help ensure that payments are never missed or late.
This article originally appeared on SoFi.