Establishing Credit

How Long Does It Take To Build Credit

Dear Experian,

How long does it take to build credit?


Dear ALM,

Building a positive credit history takes time. There is no quick fix and no way to build credit overnight. The length of time it will take to build your credit depends on a number of factors:

  1. Are you starting with no credit history?
  2. Are you rebuilding a troubled history?
  3. What are your goals?

How to Build Credit for the First Time

In order to have a credit report, you must have at least one credit account in your name. There are several options for getting that first account.

  • Your lender may be able to open a secured account for you, which is a credit with its limit tied to a savings account, which protects the bank if you don't repay the debt.
  • A friend or family member may need to cosign for a small loan. A cosigner is accepting responsibility to pay the debt if you don't, so it is a serious obligation.
  • Similarly, someone might be willing to add you as an authorized user or joint account holder on their credit card.

Once you've opened an account, you need to always pay the bills on time. If it's a credit card you should keep the balances as low as possible, ideally paying in full each month. Never have a balance greater than 30 percent of your credit limit.
It takes at least three months and often six months of activity before a credit score can be calculated. Make a small purchase each month and then pay it in full right away to show you are responsible with your credit use. In time, you will build strong credit scores.

How to Rebuild Credit

There is no quick fix when rebuilding your credit history. The length of time it will take depends on the severity of your previous difficulties.
It will take longer for a person who has had large debts, collection accounts and bankruptcy to recover than for someone who has had one or two late payments recently. It could take years for one and just a few months for the other.
However, the steps for recovering are the same for both.

  1. Catch up on any late payments. Payment history is the most important factor in all credit scores. On-time payment every time on all of your accounts is essential to having good credit scores.
  2. Reduce your credit card balances. Your balance-to-limit ratio, called "utilization," is the second most important factor in credit scores. Ideally, you should pay your credit card balances in full each month.

If you do those two things, your credit scores will begin to improve over time.

Work Toward Specific Goals

Whether planning to buy a house, get your first credit card or become debt free, set goals to work toward. The steps you take and the length of time it takes can vary depending on your goals, but setting goals helps you stay committed and focused.

Thanks for asking,
Rod Griffin, Director, Public Education

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