4 Ways to Quickly Add Credit

While there are a handful of surefire ways to raise your credit score, those methods take time and patience. You may find yourself in a situation where you need additional credit more quickly than these methods otherwise allow. In this article, we will give you some tips on how to quickly increase the credit that is available to you. It should be noted that the methods outlined here come with their fair share of financial risk and you should only use them if you are absolutely certain of your ability to keep up with the obligation and responsibility that they require.

• Get a Secured Credit Card

Secured credit cards come with many of the protections and benefits that a standard credit card carries, however you do have to pay an upfront security deposit. Putting a security deposit down protects the lenders from any possible default on your credit responsibilities. This gives them the ability to lend you a line of credit even if you have a low credit score or a limited credit history. If you maintain the account and pay it on time, the security deposit will be completely refunded to you. In most cases, these kinds of cards carry a low credit limit and high interest rates, so it can be difficult to use a secured credit card to make a large purchase.

Many banks offer this type of credit line. Usually, you put down a deposit and borrow against that deposit while also building your credit. For example, you may make a deposit of $500 and they give you a credit card with a $500 limit.

Carrying a balance with secured credit cards that allow you to borrow against your line of credit can be very costly, so tread carefully.

• Getting Multiple Credit Cards

While adding an additional credit card to your profile will not directly help your credit score, it might give you a lift by reducing your credit utilization ratio. This is calculated by taking the amount that you owe on all of your cards divided by your available credit. This makes up 30% of your FICO score. The lower your credit utilization ratio is the better. It is best to keep it below 30%, but below 10% is ideal.

Taking out a new card will give you a boost to your available credit because it can drive down your overall ratio. But this only works if you do not create a big balance with the new card. It should also be noted that opening a new account on your credit creates a hard credit check which causes your score to take a small, temporary hit. It will also lower the average age of your credit history, which is also a consideration that affects your credit score. When applying for a new card, see if you qualify for one with a higher limit than your previous card.

In addition, opening too many credit cards too rapidly is detrimental to your credit health. This is seen as financially risky behavior and your credit score will drop as a result. You should wait at least six months between acquiring new credit cards.

• Increase in Income

If you are fortunate enough to have recently increased your income, you may also be able to increase your credit score and your credit limit along with it. If you haven’t updated your income information with the issuer of your credit card recently, you should. Doing so will grant you more spending power while still keeping your credit utilization ratio low. Accomplishing this is typically as easy as following the guidelines of your credit card company’s website or calling their customer service line.

This kind of change may still take a few weeks to show up on your credit report.

• Credit Line Increase

It benefits credit card issuers to grant you more credit, so long as your finances are in good standing. Sometimes increasing your credit limit is as simple as asking directly for a credit line increase. This doesn’t hurt your credit score and the worst-case scenario is that they deny the increase.

You may also check to see if there are automatic increases that are available to you. Some issuers offer their cardholders an automatic limit increase once they have held a card for a certain time while using it responsibly.

Just make sure to carefully consider your reasoning for wanting a higher credit limit. If you have your finances in order and are simply seeking more flexibility or a lower utilization ratio, then you should be fine. However, if you are looking to do so as a means of getting out of a financial emergency, this solution is likely to just make your situation worse.

Avoid Cash Advances

While many credit card companies provide cash advance services, allowing you to withdraw cash against your available credit card balance, this can be a risky habit to form. This can be a convenient method of getting cash on hand, should you need it in a place where credit cards are not an acceptable form of payment. However, you should be aware of some of the issues that come with this:

• Upfront Cash Advance Fee: There is almost always a convenience fee that you will be charged for this service. If you are withdrawing this from an ATM, there are also likely ATM fees that you will be charged in addition to this.

• Higher Interest Rates: Cash advances are not typically treated the same as everyday purchases from your card. On top of the service fee mentioned above, you will also be charged a higher-than-normal interest rate – some as much as 5 to 8% higher than regular purchases.

• No Grace Period: Most purchases grant a grace period for repayment (usually about a month) before the borrowed money begins to accrue interest. Typically, cash advances begin accruing interest the same day that you get your advance.

• Encouraging Poor Financial Habits: Relying on cash advances as easy money to help in an emergency can start a dangerous spiraling cycle. Interest rates and service fees can accumulate rapidly and you could end up owing more than you can reasonably manage to pay back.