How Long Does It Take To Build Credit For The First Time?

What’s a Good Credit Score?

Credit scores range from 300 to 850, and a score of 760 or above is generally considered excellent. If your score is in this range, you have no reason to be asking yourself this question. But if your score is below 760, here’s a breakdown of what you can expect based on your credit score range:

  • 300-580: You’ll be denied credit, or only approved for the highest interest rates.
  • 581-650: You may qualify for credit, but it will be at high interest rates.
  • 651-710: You will qualify for credit at moderate interest rates.
  • 711-750: You’ll qualify for credit at competitive interest rates.
  • 751 and up: You’ll qualify for credit at the lowest most competitive rates available.

If you want to get the best rates (and who doesn’t?) your credit score goal should be to get above 750. But if you’re at the very bottom rung right now, that may take a while. Keep in mind, though, that any improvement of 100-200 points could have a significant impact on your credit availability and rates.

Also consider why you want to increase your credit. If your plan is to buy a home, you’ll want a score of at least 620 just to qualify. Of course, the higher the better, because you’ll get a lower rate with a higher score. If you want to buy a car, however, you can qualify with a score of less than 620. Your rate may not be great, but you’ll get the loan.

Know Where You’re Starting From

To figure out how long it will take you to improve your credit score, you need to know where you’re starting from. You can get a free credit report from each of the three credit reporting bureaus once a year, but this report does not include your credit score. Generally, you’ll have to pay for your numerical credit score, though there are a few ways to request one for free.

At MyFico you can get a copy of your FICO score — your Equifax or FICO Standard, or your TransUnion score. Each report costs $19.95 and includes your FICO score, your Equifax or TransUnion credit report, and a FICO score simulator.

The simulator is a great tool that can help you figure out how long it will take to improve your credit score. Basically, it lets you simulate various changes to your credit report, so you can see which changes will have the biggest impact. That way, you can figure out your best route for improving your credit score.

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How Long Does It Take to Build Good Credit?

Based on FICO, the most popular credit scoring model, you can generate a credit score after six months of reported payment history. But the amount of time it will take you to build a good credit score—at least 670 based on the FICO scoring model—varies. Consumers who don’t have a long credit history can still have high FICO scores if they practice good credit habits, like making on-time payments and keeping the amount of money they borrow low.

That said, it will likely take you longer than six months to build a good score if you’re starting from scratch. To improve your chances of reaching this goal quicker, you’ll have to open a credit account, such as a credit card. Afterward, you’ll need to demonstrate good credit behavior to improve your score over time.

Tips to Improve Your Credit Scores

There are steps you can take right away to help improve your credit. Here are five things the CFPB says can help boost your scores:  

  • Pay your bills on time every month. You can set up automatic payments or electronic reminders to help you remember payment due dates.
  • Stay well below your credit limit. If you have credit cards, try not to spend more than 30% of your credit limit across all of your accounts.
  • Focus on creating a long credit history. Part of what determines your credit scores is how long you’ve had credit. So the older your credit history with each card, the better. 
  • Apply only for credit you need. Applying for multiple credit accounts in a short period could signal to lenders that your financial situation has changed for the worse.
  • Check your credit reports. Your credit scores are based on the information in your credit reports. Any errors on these reports could affect your credit, so it’s important to check them regularly. You can get free copies of credit reports from the major credit bureaus every 12 months by visiting AnnualCreditReport.com.

His total credit limit is high

Droske's total available credit limit across his six credit cards was $82,700, according to the credit report he provided. Given Americans have an average credit card limit of $22,751, he has much more available credit to his name yet he's smart about how he uses it. "You have to use it, but not abuse it," Droske says.

How long does it take for a new credit card to affect your credit score?

Credit card companies have a lot of flexibility in reporting to bureaus, but they usually do so at least once a month. Therefore, you can expect your credit card habits to start impacting your credit score within a month. However, it may not have enough of an impact to move your credit score; the size of the impact depends on your existing credit history.

How Long Does It Take to Improve Your Credit Scores?

How long it takes to improve your credit scores depends on where you’re starting and how you got there. 

For example, building credit from scratch may take less time than rebuilding credit. Recovering from a few recent credit inquiries might not take as long as working back from bankruptcy. And going from poor to excellent credit scores may take longer than going from good to excellent scores.

You have to have seven years of credit history to have good credit at all

Because of the seven-year rule, you can have a spotless payment history, but still get turned down for certain credit cards if your history doesn’t go back at least seven years.

Why is that? While the “average length of credit” only accounts for 15% of your FICO score, your payment history (all seven years of it) accounts for 30%. Think of it like taking a test: If you’ve only answered 15% of the questions, it doesn’t really matter that you’ve gotten all of them right. You still don’t pass.

But that doesn’t mean your score won’t improve as the years go by—with each year that passes without a missed payment or a credit limit exceeded, your score gets a boost. Eventually, you’ll hit that sweet seven-year mark, and ascend to the highest of credit heights.

But to even get a FICO score, you need to have at least six months of credit history, and one credit bureau reporting your activity. Once you do get a credit score, you might notice that it’s going up into the high 600s or even 700s. Sometimes, you can be turned down for credit even with this seemingly good credit score, just because the bank has decided not to take on the risk of someone who doesn’t have a fully-established credit profile yet.

Read more: What credit score do you need to be approved for a credit card?

Factors That Affect Your Credit Score

To determine your credit score, FICO looks at several different variables: 

  • Payment history: Your payment history makes up 35% of your score. FICO looks at how often you make your payments on time. If you’ve had late payments in the past, that can dramatically lower your credit score. 
  • Amounts owed: How much you owe, also known as your credit utilization, affects 30% of your score. Lenders like to see that you don’t max out your credit cards or take out large loan balances. 
  • Length of history: In general, lenders like borrowers that have longer credit histories since it gives them a more accurate picture of the individual’s habits. When you’re young, the length of your history can be quite short; the length of your credit history makes up 15% of your score. 
  • New credit: When you apply for multiple forms of new credit, such as student loans and a car loan within a few weeks, it makes lender’s nervous. They worry you’ve overburdened and won’t be able to keep up with your payments. Your new credit makes up 10% of your score. 
  • Credit mix: Ideally, you’ll have multiple forms of credit on your report, such as installment loans and credit cards. Being able to juggle a mix of credit types proves you’re a more responsible borrower. Your credit mix accounts for 10% of your score. 

How to get a perfect score

While we certainly have a broad idea of the information that contributes to our FICO® Scores, the precise FICO® formula is a well-guarded secret. In other words, we can't say what kind of impact any one specific credit behavior will have. So, there's no way of knowing a precise set of steps to follow to achieve a perfect credit score.

While we don't know the precise FICO® formula, and therefore can't say exactly what is required for a perfect score, we do know some of the credit behaviors of those in the highest credit tiers.

According to the most recent data on FICO® "high achievers," we know that about 23% of U.S. consumers have FICO® Scores above 800, which is generally considered to be exceptional credit. Here's some of what we know about how people in this group behave:

  • They opened their oldest revolving credit account more than 25 years ago and their average revolving credit line is nearly 12 years old. Since "length of credit history" is a factor in the FICO® formula, this shouldn't be too surprising.
  • It's been nine months since the last inquiry on a high achiever's credit report.
  • 95% of consumers with FICO® Scores above 800 have no delinquent accounts on their credit report.
  • They have an average revolving balance of $1,446 and have 10 active revolving accounts.
  • However, this makes up just 4% of their overall revolving credit limit. In fact, the average 800+ FICO® consumer is using no more than 10% of any one revolving account.

These behaviors can get you an excellent credit score, but you really need an ideal combination of factors to get a perfect score. And it's difficult to say what that combination is. I've spoken with several people who have achieved the elusive 850 and the consensus seems to be that you'd need to have one small (but non-zero) balance on an installment loan, no recently-opened accounts, no recent credit inquiries, a miniscule balance on a credit card, and a long-established credit history, just to name a few factors.

However, to be perfectly clear, there's no guarantee that all of these factors will result in a perfect credit score.

How to Boost Your Credit Score

Before we get into how long it might take to boost your credit score, let’s look at a practical breakdown of steps you can take to do it.

Correct Errors in Your Report

  • Accounts that aren’t yours
  • Accounts that you paid on time, in full that are listed as “settled” or “charged off”
  • Oldbankruptcies, late payments, etc., that have passed the credit report expiration limits
  • Credit limits reported as lower than they actually are
  • Accounts listed as unpaid that were actually included in a bankruptcy filing

First, pull a copy of each of your credit reports (remember, you get one free from each bureau every 12 months) and check for errors. While even minor errors need to be corrected, check for more egregious errors very carefully. Here are a few to look especially closely for and then dispute as much as possible:

If you find any errors, take the steps listed in this article to correct them.

Make a Habit of Paying on Time

It’s never too late to start paying on time. Get out a calendar, write down all your due dates, and start paying your bills a few days before they’re due. This one simple habit, carried out over time, will do more for your credit than just about anything else. Remember, payment history is the biggest portion of your credit score, so pay attention to this particular area!

Pay Down Credit Card Balances

Since debt-to-credit ratio is a huge part of your credit score, getting these back in order is another great way to improve your credit quickly. If you have some money in savings, you may want to use some of it to pay down (or, better yet, pay off) credit card balances. This will save you money by reducing the interest you pay on your credit card balances and by increasing your credit score almost immediately, giving you better interest rates on debt down the road.

Increase Credit Limits

If you don’t have money available to pay down credit card balances, but you’ve been a good customer, ask about increasing your credit limits. Since your credit score looks at the ratio of balances to available credit, not necessarily the amount of debt you’re carrying, this has the same effect as paying down credit card balances. If you can pay down balances, this is the better choice, but if not, a higher credit limit can boost your credit score.

Build Good Credit Card Use Habits

Once you have your credit cards paid off, don’t close them. Having a mix of accounts, including credit cards, will keep your credit score higher. But do build good habits, such as only using your cards for certain purchases that you then pay off at the end of the month.

Some credit cards even offer helpful credit-building tools. One example is the Jasper Cash Back Mastercard, issued by WebBank, Member FDIC, which has a unique Build Your Credit Score autopay plan. With this plan, automatic payments are triggered throughout the month whenever your credit utilization rate reaches a percentage you select. This card also offers a credit limit of up to $5,000, pays as much as 6% cash back when you refer friends to Jasper¹, and has a $0 annual fee².

Add (Smart) Loans to the Mix

If you don’t have a blend of installment and revolving loans, consider adding a new loan to the mix. Again, be sure this is a smart financial choice for you and that you’ll continue to make monthly payments on time. A small installment loan, like a car loan or personal loan, can help boost your credit score, though.

Ask Your Lender for Some Leeway

If you recently made a late payment when you nearly always pay on time, call your lender. If you’re a good customer, they may agree to erase that late payment from your credit report. Some lenders will do this after you make several months of on-time payments. Because late payments have a hugely negative effect on your credit score, this simple step could really help raise your score.

Don’t Close Old Accounts

If you’re paying off credit cards, it can be tempting to close those accounts. But don’t! Remember that you want to keep your average account age as old as possible, so leaving older accounts open is the best way to do this. Just be sure you stay on top of any fees you might be charged and steer clear of the temptation to run up account balances again.

Shop for New Loans Quickly

If you’re in the market for a new loan, shop your options quickly. Credit inquiries for the same type of loan that come in within a week or two generally count as one pull on your credit report. That means that your score isn’t dinged by as much as if you take months to shop for a car loan.

Boost your credit score for free Experian Boost™ helps by giving you extra credit for the utility and mobile phone bills you’re already paying. Until now, those payments did not positively impact your FICO® Score. Start now for free.

Experian Boost Disclaimer– Results may vary. Some may not see improved scores or approval odds. Not all lenders use Experian credit files, and not all lenders use scores impacted by Experian Boost.

Its not necessary to have a perfect score

Ulzheimer says his FICO credit score has hit 850 off and on for the past five to seven years. That achievement became easier once his credit history passed the 20-year milestone, he says. Yet Ulzheimer notes he hasn’t been striving for perfection with his credit score – he just knows the right behaviors for managing his credit well.

Unlike Ulzheimer, Stevens says racking up a perfect FICO credit score of 850 has been his goal for a few decades.

“As many do in their 20s, I experienced financial instability and suffered some setbacks that greatly impacted my credit scores. That credit also limited my economic flexibility,” says Stevens, managing partner of a private car service in Austin.

He adds: “As I grew older, I became more aware of how good credit opened opportunities for advancing and enhancing my life. So I continued to work on getting an ever-better score. After a while, it not only became a goal but … a total obsession.”

But Ulzheimer says obsessing over how close your FICO credit score is to 850 doesn’t necessarily pay off. Why?

Ulzheimer says an 850 FICO score isn’t needed to gain the best interest rates or APRs on credit cards and loans. In fact, he adds, there’s not much difference in that regard between, say, 800 and 850. More than anything else, arriving at 850 merely gives you “bragging rights,” Ulzheimer says.

“As long as your scores are above 760, you are likely going to get the best deals,” Ulzheimer says.

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