8 Smart Techniques to Build Good Credit | Best Helpful Tips in 2022

8 Smart Techniques to Build Good Credit

Improving your credit score to the next level is the smart investment of both your time and discipline. Proper maintaining a good credit score plays a vital role in qualifying for loans, credit cards, and affordable interest rates. Even though, if you don’t have any immediate plans and process to apply for financing. Just think your credit score is like a number that is based on your history of borrowing and repayment. Besides, some of the cardholders are more likely to push down by a low credit score. That’s because they didn’t use their credit card in the right way. So, if you are one of them who has poor credit and finding a way to let yourself out, then it’s not impossible to recover your credit score. To keep an eye on these things, today, I will teach you the 8 smart techniques to build good credit in 2020.

Let’s say a good credit dedicate everything, whether getting a loan or the interest rate. In other words, lower the interest rate results in higher getting cash into the bank.

Suppose if you want your credit score to be good enough that it put some value in the market then, you may require some good discipline and smart work.

If you are starting with your first credit card, then each and everything you do that involves your credit will become a part of your credit score history. So, it’s better to improve your credit slowly and slowly, that’s why you don’t have to face any issues due to a low credit score.

Okay, now before we move to learn the best techniques to build a credit score, first, let’s see how your credit score works. And how your credit is determined or calculated in a real financial scenario.

Your Financial security depends upon the strength of your credit.

How Your Credit Score is Determined?

There are two most popular types of credit scores: FICO and VantageScore. Most of the lenders use these two types of credit scores for calculation of estimate risk while doing some business with you when you first apply for a certain amount of loan or credit. Almost 90% of lenders use FICO scores to make credit decisions for your agreement.

So, having a perfect credit score (600 or higher) puts a ball completely in the corner. This means lenders will often fight to start a business with you by offering the best interest rate. It also helps you to minimize the long-term low mortgage and the loan cost.

FICO credit score ranges from 300 to 850, so when the score reach between 800 to 850, then indeed, it’s an excellent score for lenders.

Besides, the credit scoring model is a kind of complex software program. Why? Because it completely evaluates your credit report details and estimates the entire risk.

So how does the scoring model calculate your credit score?

  • If you make a bill payment late, then how late you paid.
  • In which year, you have first opened your credit account and your average age at that time.
  • Whether you have applied for the next credit card or not in the past 12 months.
  • The proper relationship between your credit limits and your balance.
  • Your good and bad experience with the mixture of other account types such as installment, revolving and more)

Furthermore, if your credit reports find all the above things and provide a positive result, then it’s a good thing. You have well maintained your credit account in the past years.

Hence, that’s how your credit score is determined.

Did you know that?

Now, let’s move to our main topic in this article to learn different helpful techniques to build a good credit score which will show a positive impact on your credit history.

Also read: Simple Registration, Activation and Helpful Benefits of MyVanillaDebitCard in 2020

8 Smart Techniques to Build a Good Credit

Now get ready to improve your credit score even though you have less in the past. Here, try these following smart techniques and methods in 2020.

techniques to build good credit

Start With Only One Card 

At the very beginning, most of the cardholders collect lots of credit cards within a few years of using them. They make the first unseen mistake by opening too many credit cards way earlier. If you use lots of credit cards, then you will end up using them even more, result; become harder to keep up with your balance. It also impacts your payment system because you will not have sufficient balance after using many cards, right? So, try to keep it low as possible for your own financial benefit.

Furthermore, having too many credit cards also bring too much inquiry for your card. Why? Well, suppose if you own lots of mobile phones then definitely someone will ask how do you own so many mobile phones? People might say maybe you stole them or you are a fraud person. It hit’s just like this by owning too many credit cards.

Besides, it also does a negative impact on your credit score because credit inquiry counts as 10% of your credit score. With only one card helps to prevent the credit age limit (also 10% of your credit score). 

So, first, use only one credit card and learn to be a responsible cardholder. After that, you can apply for another one if needed.

Check Your Credit Reports

For some people, it might sound surprising to check the report of your credit. Well, you will not get only 2 scores or 5 credit scores, hundreds of scores will be flooded into your credit card. And you don’t even know which credit score your lenders will use to grade your credit report. So, it’s better to examine your report.

You can check your reports from the TransUnion, Equifax, and Experian. Check the free report provided by each bureau once a year at AnnualCreditReport.com

Besides, some mistakes can occur in your credit report due to fraud, which can lower your credit score. For that, you might have to pay a certain amount and also for the occurred issues. But, you can still improve your score by reporting an error to federal law. So, if you manage to convince them regarding the error, then once again, your credit might improve.

Borrow Only What You Can Afford

A credit card is not build to buy everything you want. This kind of behavior is likely to be dragged into debts. Stuck in the black hole of debts means hurting your credit score.

So, what we can do is build a good habit of charging on things which we only can afford. At first, it’s hard to implement, but in the future, you will be a responsible cardholder. You can easily borrow the money and new credit when you show your good discipline that you can buy things which you only can afford. In addition, you can also avoid getting in an excessive amount of debt.

If you continue that habit, then you can also apply for a loan. You already know that you don’t want to hurt your credit score, right? So before applying for a business loan, make sure that your monthly payment does not exceed the amount of your balance.  

Make a Payment of Bills on Time

Another effective way to boost your credit score is by paying the bill on time. What it does is show the lenders that you are a responsible cardholder. You can also pay off your full balance for each month. The payment covers a larger amount of your credit score, so to make a better payment timeline and increase the score, the time comes first.

Furthermore, your credit score covers almost 35%, according to the FICO report. So, when you avoid common things like late payment, repossessions, and foreclosures is a horrible idea to hurt your credit score. 

Hence, late payment makes a huge negative impact on your credit score. Make a habit of early payment and shine your credit score from time to time.

Keep Old Credit Card Open

Let’s say when you are trying to improve your credit profile better, always be aware of your old credit card. Closing your old card can make the work even harder and will lose your card credit limit. It’s because when the FICO calculates your overall credit utilization, your credit score can be seen lower. Do you like that kind of situation?

Nobody likes!

So, try to keep your old credit card open and occasionally use the card to prevent it from closing. 

Increase Your Credit Limit

Suppose, if you are in not a position to pay down your balances. You can choose another option to improve/boost your credit utilization. For that, call your creditor and ask to increase the credit limit. 

Let’s say you max out your card at $2000, and if you get a limit increase to $3000, you have already cut your credit utilization in half. Here’s a key is not to spend your credit but to increase the credit limit. 

So, you can try this approach to maintain your credit score.

Become an Authorized User

What authorized users mean is that to be added on someone else credit card account. Added into another person’s card? Yes, you heard, right. Let me explain.

First, you have to find a relative or your loved one who is a responsible cardholder and has a higher credit limit. After that, ask them to add you to their card as an authorized user. You don’t have to use their card or an account number for your benefit. It’s only to be an authorized user on your credit report. After that, a report shows that you are utilizing your card properly regarding payment. As a result, the improvement of your credit score.

Besides, keep in mind that you won’t get good results overnight. You have to wait for a couple of months to fully take the effect of this strategy. 

Age Your Credit Account

Our another method from the list of smart techniques to build good credit is to age your credit account.

The longer you keep a credit card, the better benefit for your credit score. Use your card almost for a long time so that your credit utilization history gets better and helps to boost your credit score. 


These are the above 8 smart techniques to build a good credit even though you have a poor credit score. You can implement any of these or all one by one to boost your credit in no time. And again, you won’t earn a good 800 credit score by overnight. Keep trying each step, which can bring huge benefits to your credit. 

Develop a habit of using credit for a long time. Check your report from time to time, and don’t forget to pay your bills on time. Apply for the credit if only you need one; otherwise, don’t apply. If you follow these things, then you can build a good credit score over time.

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Also, do check our other credit card related article on our official site Online Help Guide.

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