Having an established credit history tells a story of how you have handled monthly debt obligations in the past and helps shed light on what type of borrower you may be. If you are starting without an established credit history, it generally takes at least six months of reported credit activity to generate a FICO Score. Building good credit usually takes longer because your score develops as you establish a record of managing credit.
If you don’t have an established credit history or are looking to improve your score, it is less predictable. Rebuilding an existing score is less predictable. Your credit may improve as lenders report updated balances and payment information, but there is no standard number of weeks or months it takes to rebuild credit.
| Situation | General Timeline |
| Establishing a FICO Score from scratch | Generally at least six months |
| Building a stronger credit history | Usually longer than six months |
| Rebuilding an existing credit score | Varies based on what is affecting the score |
Having a credit score and having a strong credit profile are not necessarily the same thing.
Timeline for Building Credit From Scratch
If you don’t already have an established credit history, FICO generally requires at least one credit account that has been open for six months or longer and at least one account reported to a credit bureau within the past six months before it can generate a valid FICO Score. Sometimes the same account can meet both requirements.
That said, reaching six months does not guarantee a particular score. It means your credit report may contain enough information for a score to be calculated.
Your score can continue to change as more information is added to your credit history. Payment history, balances compared with available credit, account age, new credit activity, and the types of accounts on your report can all play a role.
Timeline to Building Good Credit
So, how long does it take to build good credit? There is no fixed number of months it takes to build a good credit score.
Someone can meet the minimum requirements for a FICO Score without having a long track record of managing credit. As accounts age and more payment history is reported, scoring models have more information to work with.
What counts as a “good” score can also vary depending on the scoring model and lender.
Instead of trying to reach a certain score by a particular date, focus on the information being added to your credit report. Pay accounts on time, keep revolving balances low compared with your available credit, and give your accounts time to age.
How Long Does It Take to Rebuild Your Credit Score?
How long it takes for your score to recover depends on the particular cause of the drop.
High credit card balances affect your credit score differently than missed payments or other negative marks. If your score is low due to high credit utilization, it can improve once your creditors report lower balances.
Negative payment information can remain on a credit report for up to seven years. Your credit score can still rise while that information remains. New data is added to your report as you keep using and managing credit.
Check your credit reports if your score has decreased. Look for late payments, higher balances, or new accounts. Also check for hard inquiries, closed accounts, and any information you do not recognize. You can dispute inaccurate information with the credit reporting company and the business that supplied the data.
What Has the Biggest Impact on Building Credit?
Make Payments on Time
This is a great and easy way to build good credit. Payment history is an important part of your credit score. Missing a payment can work against the positive history you are trying to build.
Of course, you should try to pay the bill in full each month. However, if you cannot pay the total amount one month on the due date, try to pay part of the balance or the minimum fee so you do not accrue penalties or late fees.
If you have multiple accounts, bills, or credit cards, it can be challenging to remember when each bill is due. A great way to ensure you are making timely payments is to set up autopay.
Keep Credit Card Balances Low
Credit scoring models look at how much of your available revolving credit you are using, often called credit utilization.
For example, a $300 reported balance on a card with a $1,000 limit represents 30% utilization. The Consumer Financial Protection Bureau says experts commonly advise keeping total credit use at no more than 30% of available credit. Treat that as a guideline, not a guarantee that your score will improve.
You do not need to carry a balance or pay interest from month to month to build credit.
Give Older Accounts Time to Age
The length of your credit history can affect your score.
Closing an older credit card may shorten your available credit history and reduce the total revolving credit available to you. That could increase your utilization if you carry balances on other cards.
Still, there may be valid reasons to close an account, such as annual fees or changing financial needs. Consider the effect on your overall credit before making the decision.
Apply for New Credit Carefully
Applying for credit can result in a hard inquiry, and opening several accounts within a short period can affect the new credit portion of your score.
More accounts do not necessarily mean faster credit growth. Apply when the account serves a purpose, and you are comfortable taking on the obligation.
Check Your Credit Reports for Errors
Better credit habits will not correct inaccurate information already being reported.
Review your reports for accounts you do not recognize, incorrect balances, payments incorrectly marked late, duplicate debts, or accounts with the wrong status.
If you find an error, follow the credit bureau’s dispute process and contact the company that reported the information when appropriate.
How to Build Credit Without Having an Established Credit History
You do not need several new accounts to establish a credit history. One account that is reported and managed responsibly can help you get started.
Open a Credit Card You Can Manage
A credit card reported to the credit bureaus can help establish your history. Before applying, review the card’s terms and confirm that account activity is reported to the credit bureaus.
Keep spending manageable and pay on time. Large purchases are not necessary to build payment history.
Become an authorized user on a credit card
If you cannot apply for new credit on your own, another simple way to build credit is to become an authorized user on a family member’s credit card. If you are an authorized user, the account will impact your credit report. Thus, if the family member pays their bills on time and in full each month, it will positively impact your credit score.
Building Credit Before Applying for a Mortgage
Credit is one part of a mortgage application. Lenders may also review income, assets, existing debts, property details, and other qualification requirements. If you are thinking about buying a home, review your credit before you are ready to make an offer. That gives you time to check for errors, understand your existing debts, and see where your credit stands.
Once the mortgage process has started, avoid making major financial changes without speaking with your loan specialist. A new credit card, vehicle loan, financed purchase, or higher credit card balance could affect your credit or your debt-to-income ratio.
If you need to apply for new credit while your mortgage is in process, talk with your loan specialist first. GuardHill’s mortgage process dos and don’ts covers other financial changes to consider during this period.
Credit may also be reviewed during the mortgage underwriting process, so changes to your finances before closing can matter.
Experts Are Here to Help
If you or someone you know is interested in learning more about credit or would like to speak with a mortgage specialist on how to improve your credit score, contact us today.
Frequently Asked Questions About Building Credit
How Long Does it Take to Improve Your Credit Score?
If you notice your credit score dropped, it may be because of recent late payments, an error on your credit report, or a recently closed account. Depending on the severity of the issue, it may take a few days, weeks, or months for your score to improve.
How long does it take to build credit with a credit card?
If you are starting from scratch, a credit card can help create the account history needed for a FICO Score. The account generally needs to have been open for at least six months and reported to the credit bureaus.
Can you rebuild credit after missed payments?
Yes, but there is no standard recovery period. Negative payment information can remain on a credit report for years, while newer positive payment history continues to be added.