How Long Does It Take to Build Credit?

First Republic Bank
April 29, 2022

  • The length of time required to build good credit depends on your starting point and may vary from a few months to a few years.
  • In general, it takes less time to improve good credit or begin building credit than it does to recover from poor credit. 
  • Making smart choices with your credit, like making timely payments, can help you build a strong credit history. 

Unfortunately, there’s no one-size-fits-all timeline for building credit. How long it takes to build a strong credit history entirely depends on one’s ability to manage credit wisely over time, and it may be indirectly affected by factors outside your control. Your age, for example, may affect the length of your credit history, which may affect your score.

However, understanding how long it may take to build credit can help you set realistic goals. Here, we’ll discuss timelines for building credit, as well as tips for increasing your credit score. 

How long does it take to build credit from nothing?

If you’re new to credit, expect a short wait between opening your first account and being able to access your credit report. How long does it take to get a credit score? The answer depends on the scoring model.

For instance, FICO, one of the major organizations that assigns credit scores, requires that users have at least one account open for six months or more before assigning a credit score. If you’re opening your first credit card, for example, and have no other sources of credit, that means you'll have to wait at least six months to receive a valid FICO score. Other credit formulas, such as VantageScore, may have different criteria to assign users a score and take more or less time.

Regardless of the specific timeline, the steps to building credit remain the same. The key to establishing credit is ensuring credit activity, such as loan payments and credit card activity, is being reported to the major consumer credit bureaus in your name.  

Check your credit report in the months after you begin building credit, and continue to monitor your credit history to assess your progress.

How Are Credit Scores Generated?
Credit scores are generated based on the information in one’s credit report, including a users’ payment history, current credit utilization and the length of their credit history. Users with a good credit score generally make timely payments and use a small amount of their available credit.

How long does it take to increase your credit score?

Building a strong credit history and a good credit score signals to lenders that you have solid control over your credit use. However, increasing your credit score takes time, and how much time depends on your unique situation. 

If you have a thin credit file, opening an account and making all your payments on time may help increase your credit score relatively quickly. Similarly, paying off a credit card or significantly lowering the balance on a card may increase one’s score within a month or two. 

However, how long it takes to raise your score depends on your starting point. If your credit is good, but not great, you may be able to increase your score quickly. Those with bad credit may find it takes a year or more to recover and achieve a good score. Major credit events, like declaring bankruptcy, negatively affect your score for years, while a single late payment may be quicker to recover from. 

Tips for building your credit score

There are several ways to build credit, and the strategy that’s right for you depends on your unique situation and goals. 

If you have no credit history, for instance, your approach may differ from an individual trying to recover from poor credit. Other factors apply as well. For example, a high school student who just turned 18 may have a different approach than an adult who recently moved to the United States. 

Regardless of your circumstances, understanding how credit building works can help you uncover a strategy that may work for you. 

Understand how a credit score is calculated

Understanding what goes into a good credit score is a good starting point for anyone looking to build their credit history. 

Credit scores are calculated based on five factors:

  • New credit accounts: An indication of any new credit accounts 
  • Credit utilization ratio: How much available credit is being used 
  • Payment history: A track record of when payments are made
  • Length of credit history: How long the user has held their oldest credit account 
  • Credit mix: The types of credit that make up the user’s credit profile, for example, a credit card, an auto loan and a mortgage 

Developing habits that cater to these scoring criteria — like making your payments on time, and keeping your oldest credit account open and in good standing — should put you on the path to achieving a good credit score. 

Become an authorized user

Being added as an authorized user on someone else’s credit card account will likely result in that account’s entire credit history being reported in your name. This makes it arguably the fastest and easiest way to establish a good credit score — as long as you (and every other authorized user on the account) use the account wisely. 

This method may allow parents to establish credit files and scores for their children without the need for the child to open their own credit account. However, some lenders may have minimum age limits for authorized users. 

Use a credit card

Credit cards are available for credit beginners and experts alike, so using a credit card may allow you to build your credit history. Credit beginners, or those with a thin credit history, may qualify for a secured credit card, one backed by a cash deposit from the card holder. For secured credit cards, you can put down money ahead of time, say $500, and then the credit card company will give you a $500 credit card. This is a very useful way for you to begin their credit relationship if you have no credit history.

No matter what type of card you use, ensure you only use credit cards for expenses that fit within your monthly budget. This will allow you to pay off the card each month and work toward a stronger credit history. 

Use a credit builder loan

Those looking to establish a credit history or those who have poor credit might consider using a credit builder loan to achieve their goals. 

In some ways, a credit builder loan works similarly to any other installment loan: You borrow an agreed-on amount of money and then pay it back, along with interest.

However, a credit builder loan is specifically designed to help you develop a stronger credit history. The money you borrow is placed into a savings account and, once you’ve made the required payments to repay the loan in full, you can access the funds. 

A credit builder loan costs money, because you pay interest over the lifetime of the loan. However, it builds your credit history, which may increase your odds of approval when applying for other credit, such as a car loan. 

Ask for a credit limit increase

If you’ve been doing well managing your credit, and you have credit cards in your name, consider asking for a credit limit increase. This increases the amount of credit available to you, making it easier to lower your credit utilization ratio and potentially increase your credit score. 

Be patient and consistent

Building credit takes time, and exactly how much time depends on your starting point, as well as your strategy for building credit. However, the positive behaviors that lead to good credit — like making your payments on time and maintaining low balances on your credit cards — will pay off over time and develop into a strong credit history and a good credit score that can help you achieve your goals.

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