Best Way to Build Credit Fast

The cardinal rule of personal finance is to establish good credit. Without it, you'll have no access to borrowing money on which you can eventually repay with the help of interest. That's what makes it so important that even if you're on a tight budget, try to pay your bills responsibly each month first before anything else. Once you do start building your credit history and score, keep them in stellar condition by paying on time for as long as possible (credit scores are calculated based on payment history). If there's someone who should be entrusted with handling your finances, make sure they know how crucial maintaining an excellent credit rating is. But before you get out there and borrow money to establish strong credit credentials, think about these four steps:

1. Use a credit card responsibly

2. Find an affordable loan to consolidate your debt

3. Take on a side hustle or second job until you can repay that consolidation loan

4. Build up savings before considering a large purchase like a house

The best way to build credit fast in Canada is through responsible use of credit cards which allow you to establish an excellent payment history while rewarding you with points that can eventually turn into cash. While it's important to pay off all your bills each month, it's also important to keep a low balance and use your card at least once a month. To further help you maintain good credit, only apply for one or two cards and wait until they arrive before applying for more (most lenders will deny multiple applications within a certain time frame). And if you don't have existing transaction history, using your card at grocery stores and other retailers is the best way to build up your credit score.

Another option would be taking out an affordable consolidation loan such as refinancing or debt-consolidation loans (for example creditcards.ca/canadian-rate-comparisons/). Doing so means consolidating all of your debts under one interest rate which should be lower than the rates of your individual debts. There are other benefits as well, including keeping all your accounts in good standing with a single lender because payment history is reported on an aggregate basis.

Taking on a side hustle or second job could be another option but it's only recommended if you can set aside enough to repay the debt consolidation loan within two years. This may also help you prepare for unexpected expenses, which means shifting some of your discretionary spendings towards paying off debt. It should also give you a larger monthly budget that can accommodate payments towards credit cards and loans. Just make sure that whatever service or product you offer is something you're actually passionate about doing because when it becomes work, it eats into your free time, making repayment even harder.

Another way to use your spare time is by starting a side business or online entrepreneurial activity that can turn into a legitimate full-time job. In the long run, though, it's more of an investment in both time and money because you're essentially spending on things you would have to spend on even if you had a full-time job - whether it's buying equipment for your service or paying monthly bills associated with operating your online venture (for example web hosting, domain registration, etc.). It just takes much longer to see financial returns when you don't already have an existing client base willing to pay for quality services or products. All this isn't to say that you shouldn't consider getting creative with how e-commerce works so as to turn a profit as quickly as possible (for example: buying products in bulk and selling them at cost), but those types of businesses don't happen overnight.

If you're looking to make the most of your time, putting together a solid investment portfolio can help you build passive income with minimal effort on your part. You'll soon find yourself earning more than what you need to live comfortably every month which opens up opportunities regarding debt repayment plans and larger purchases like real estate properties. To do this though, start by opening an RRSP and choosing investments that complement how long you plan on staying invested (aka how much risk you can tolerate). For example, GICs are best for people who have no intention of holding onto their investment for longer than one year while equities (stocks) are best for people who can stay invested for 5+ years.

For those with the time but struggling to save, using a cashback credit card is a great way to earn rewards

while building up your savings. The trick though is making sure you have an emergency fund so you don't have to dip into your reported credit limit which could affect your credit score down the road. A good rule of thumb would be keeping at least 3 months' worth of living expenses in an accessible savings account.

That way if something goes wrong, you'll recover faster knowing that you have enough saved up to pay rent or buy groceries without having to rely on debt consolidation loans or borrowing from friends and family members.

If you think you can't do any of these because you don't make enough money, consider the possibility of finding a better-paying job or changing your current one so you'll be able to pay off debt and start building credit faster. Many companies and industries offer higher starting salaries and bonuses which essentially compensate for relocation expenses (if applicable) and offer opportunities for growth. Consider taking up an additional part-time job, if possible, to help cover fixed costs like rent or transportation while also allowing you to pay down debts at a faster rate (for example high-interest credit card balances). If that's not reasonably possible in your current situation, look into alternatives such as freelance writing through websites like Contena, Fiverr, Upwork, Freelancer, etc. where you set your own rates, choose the work that interests you, and develop contacts with similar-minded professionals who can recommend your services to other potential clients.

If none of these options seem viable for your situation but you're still looking for ways to pay off debt or build credit fast in Canada in 2022, consider getting a personal loan at an affordable interest rate so you have more financial leeway without feeling too overwhelmed by being buried under high-interest credit card balances. To find the best personal loans near you, check out Ratehub's comparison tool which lets you view leading lenders based on your location so you don't have to waste time searching through loan offers tailored to people living in different cities. Just enter information about yourself, your debt, and your preferred repayment terms so you can see which lenders are interested in working with you to come up with a personalized solution.

Borrowing money through personal loans is one of the fastest ways to pay off debt or build credit fast, provided you use them responsibly by making every effort to repay on time. Once approved for a loan, ask lenders to send their offers via email so it'll be easier for you to compare different offers side-by-side without having to input sensitive information into multiple websites that may sell their data without consent. This way you can make informed decisions about where to apply based solely on interest rates rather than trying to sweet-talk someone over the phone who doesn't have skin in the game.

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