Get a Good Credit Score from Scratch

If you are thinking about how long it takes to build credit from 0 or how quickly I can build good credit, then you should read the basic information and tips to help you get good credit in a few months. Find out how a personal loan affects your credit score and what are the benefits of obtaining a personal loan

Good credit is very important these days as it helps you get the best loans with the best interest rates. However, not all people have good credit and they are interested in how it can be restored. So, if you are starting from scratch, you are probably wondering how long it takes to build credit.

So, study the basic information on how you can get a good credit score as quickly as possible. If you follow these tips, you will be able to get access to the best loan offers in 3-6 months!

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How long does it take to build good credit from scratch?

If you are starting from scratch, it won't take long to build your credit history. As a rule, it takes three to six months of regular lending activity in order to count on a good credit rating. Of course, it is important to use credit frequently during this process to keep your file as thick as possible. Learn basic ways to build credit fast.

So how fast can you build credit?

In order to quickly build credit, you need to follow basic financial advice. Study the most important ones in order to get a good credit rating.

1. Credit card.

First of all, before doing anything else, you need to get a credit card. Sometimes borrowers cannot get a regular unsecured card, but it is possible to apply for a secured one. Of course, it is important to note that such a card requires collateral, which will guarantee some stability to the lenders. However, the presence of collateral and a set limit makes it easier to obtain a secured card.

Why do you need a credit card? You may not have known this, but credit cards can help you get good credit faster as your information is passed on to the credit bureaus. Thus, the information about the balance is often reported monthly to the credit bureaus, and even if you only make a few purchases each month, it will be reflected on your credit history.

Remember! Every time you make an on-time credit card payment and maintain your outstanding balance below 30% of what is available to you, you improve your credit report.

2. Installment loan

If you get an installment loan and pay it off on time, you can also add a little bit to your loan file. Thus, you can explore different options for an installment loan and choose the one that is convenient for you, get it and repay it in a short period of time. What's more, you can also take out a personal loan and pay it off in installments. Thus, your credit will be improved faster.

It is also important to know that the variety of credits affects your score. Thus, if you have a credit card, you pay off the loan in installments and then the personal loan, it will be a good way to build a loan from scratch. However, remember to make timely payments!

Many people are reluctant to take out a loan that they don't just need to increase their credit, but it can be a good option. However, if you are looking for an installment loan or personal loan, it is very important to take the exact amount that you will definitely be able to repay on time. Otherwise, you can get an additional amount of problems that negatively affect your loan.

Of course, while timely payments will be a good way to improve your credit score, missed payments can ruin it in a short time. Thus, it is important to pay attention to your loan and pay the debt on time. Also, if you cannot get a loan on your own, you can always turn to your loved ones so that they become your co-signer. However, remember that not all lenders allow cosign, so it is important to find out information about this before applying.

It is also important to make sure that you can repay the loan even if you asked someone to be your co-signer. Since the person risks his credit, it is important not to let him down.

Why should you maintain good credit?

Good credit history is essential to anyone's life, as it enables you to obtain loans in order to make major purchases such as a house or a car. Moreover, if you are in a difficult financial situation and you do not have money before your paycheck, you can also apply and receive fast funding. Thus, good credit affects your financial health, and this is important if you want to get not only good loans but also favorable conditions.

Remember that you cannot build a good credit from scratch very quickly, as this process takes time. However, following the advice, you will be able to see the result of your work in a few months.

What should you avoid while building your credit?

Of course, building credit is a long process. It is important to keep track of your finances and plan your budget in order to maintain a good credit rating. However, it is much easier to worsen it. So, learn what to avoid if you want to have good credit.

Don't miss payments

You've probably heard about this before, but forgetting about debt and missing out on a payment will lower your credit score. Thus, before taking out a loan, be sure that you can repay it. If you forget about debt, set up automatic payments so that your credit score does not deteriorate.

Don't use too much of your available credit

It is very important that your credit utilization is below 30%. Thus, it is not worth using most of your credit if you want to maintain a good credit history.

Avoid hard credit checks

If you get a lot of hard credit checks in a short amount of time, it can also lower your credit rating. As a rule, this happens when people urgently need money and they get rejected. Thus, they have to turn to another creditor who again conducts a hard check. So, in order to avoid this, find lenders who do a soft credit check first so you can see your terms and interest rates before you apply.

Thus, by paying attention to these points, you can protect your loan from damage and get favorable conditions and interest rates in the future.

Dos and Don’ts of Using a Personal Loan to Build Credit

So, as you already understood, building a loan always involves getting a debt so you can pay it back. We've already talked about credit cards and installment loans, but what about a personal loan? What should and should not be done if you want to build good credit? Study Dos and Don’ts to build credit correctly.

Do comparisons of different loan offers

When looking for a loan, it is very important not to settle for the first offer. Even though loan terms and interest rates may be good, you should always look at the various offers from other lenders. Thus, explore all options and consider fees, penalties, interest rates, and loan terms. Thus, the less money you spend, the better for you. Comparison will help you find the best deal for you.

LendYou will help you get the cash you need when you need it. You can apply for Payday Loans, Installment Loans or Personal Loans, etc. Compare the lenders and get matched with the best one.

  • MIN Loan Amount: $100
  • MAX Loan Amount: $35000
  • Terms: Varied
  • Rates and fees: Starting at 4.99% APR
  • Turnaround Time: 1 business day
  • $100 - $1000 Payday Loans
  • $1000 - $5000 Installment Loans
  • $5000 - $35000 Personal Loans
  • 18 years of age or older
  • U.S. citizenship
  • Valid checking or savings account with direct deposit
  • Minimum regular income of $1,000 per month
  • Not be a regular or reserve member of the Air Force, Army, Coast Guard, Marine Corps or Navy (or be a dependent of someone who is,) serving on active duty under a call or order that does not specify a period of 30 days or fewer.
Pros
  • High up to $15,000 loan amounts. 
  • Minimal restrictions on how you can use your loan.
  • No collateral or guarantor.
  • Bad credit is OK. 
Cons
  • It's not a direct lender, so you'll need to clarify rates and terms with the company you are matched with. 

 

Check Into Cash offers Payday Loans, Title Loans, Personal Installment Loans and other money products at affordable rates with convenient repayment. 

  • MIN Loan Amount: $50
  • MAX Loan Amount: $3000
  • Terms: Vary by state.
  • Rates and fees: 261% to 782% APR
  • Turnaround Time: 1 business day
  • Payday Loans
  • Online Payday Loans
  • Title Loans
  • Installment Loans
  • Online Installment Loans
  • Line of Credit
  • Flex Loans
  • Other Services
  • Check Cashing
  • Bill Pay
  • Western Union 
  • U.S. Money Card
  • Cell Phone Top-Ups
  • Sell Us Your Gift Cards For Cash
  • Active checking account open for 90+ days
  • US citizen or permanent resident
  • Personal and work phone number
  • Valid email address
  • 21+ years old (19+ in Alabama)
  • Social Security number (for Indiana residents only)
Pros
  • You can get even as low as $50.
  • Quick funding on the next business day.
  • Money can be used for any personal needs.
Cons
  • Not available in every state.
  • APR can be more than 153.73% depending on your state.
  • High late payment fees.

 

Instant Loans USA will help you get the cash you need when you need it. You can apply for Payday Loans, or Personal Loans online. Choose the best rates and terms and get the same-day financing.

  • MIN Loan Amount: $100
  • MAX Loan Amount: $35000
  • Terms: Varied
  • Rates and fees: Starting at 4.99% APR
  • Turnaround Time: 1 business day
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  • $100 - $1000 Payday Loans
  • $5,000 - $35,000 Personal Loans
  • 18 years of age or older
  • U.S. citizenship
  • Valid checking or savings account with direct deposit
  • Minimum regular income of $1,000 per month
  • Not be a regular or reserve member of the Air Force, Army, Coast Guard, Marine Corps or Navy (or be a dependent of someone who is,) serving on active duty under a call or order that does not specify a period of 30 days or fewer.
Pros
  • High loan amounts up to $35,000. 
  • Minimal basic requirements.
  • No collateral or co-signer.
  • Bad credit is OK. 
Cons
  • High interest rates.

 

Greenlight Cash created an online platform to connect consumers like you with reliable lenders across the country. They partner with a large network of professionals so you get a chance to work with one of them and meet the challenge of improving your financial situation in the most effective way. Once you tap submit, you get one step closer to receiving the funds.

  • Payday Loans
  • Installment Loans
  • Personal Loans
  • be a legal U.S. resident
  • be at least 18 years old
  • have a stable source of income
  • be currently employed
  • have an active bank account
Pros
  • Unrivaled flexibility and accessibility.
  • Predictable monthly payments

  • Quick and simplified borrowing process

  • Any credit is welcome
Cons
  • Not a direct lender.

 

 

 

Don’t apply to multiple lenders

Every application you make to get a loan is reflected on your credit report. Thus, you may notice that your credit rating has dropped. So, if you think that you have applied to several lenders at once, this is a good idea - you are mistaken. Thus, it is very important to compare offers and choose the one lender that offers the most favorable terms. Moreover, it is important to make sure that you meet its requirements in order for your application to be approved.

Do review the terms and requirements

Before signing a contract, it is very important to study your loan agreement. Perhaps you will notice hidden commissions and payments and you will not be satisfied with this loan offer. Thus, it is very important to read the contract and ask the lender the questions you are interested in before accepting the offer.

Don’t take more money than you can pay back

If you have been approved for a $ 5,000 loan, this does not mean at all that you need to accept this loan offer. Thus, if you do not need such a large amount, you better get less so that you do not have problems with paying out as well as additional interest. Moreover, you should not take a loan that you are not sure what you can repay. Thus, before applying, plan your budget in such a way that you consistently have money to pay off the debt.

Do make payments on time

In order to build good credit, it is important to pay off your loans on time. You probably know that the main factor that affects your credit rating is your payment history. Thus, if you miss payments, you will worsen your credit history very quickly.

Therefore, it is important to have a payment plan in order to avoid late payments. Lenders often charge fines and fees if you miss a payment. Thus, watch out for payments in order not to damage your credit.

Don’t get other debts

You may want to make a big purchase that is not part of your plans. Thus, you will need money and another loan may seem like a good option for you. You shouldn't do this if you are building your credit. Since a high debt-to-income ratio will slow down the improvement of your credit, you might be better off delaying your purchase until a better opportunity.

Conclusion

Building a credit from scratch is a lot of work that takes a long period of time. However, if you want to have good credit, you will have to maintain it at all times. Avoid unnecessary debt, missed payments and extra spending. Use your money wisely!