How Long Does It Take to Build Credit: Improving Your Credit Score 101 (2024)

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How long does it take to build credit? Well…a while! That's why it's important to start young. But, it's also important to have a plan and not use the credit irresponsibly (which can be hard to do when you are young).

You really do need to take your credit score very seriously because it's the key to so many financial aspects of your life. It will determine if you can buy a house, or a car, start a business, and many other things. It will also determine your interest rate on the loans for said items!

Unfortunately, by the time many people realize this, they have already done some things to set their credit scores back. Even far back.

That said, if you find yourself in this situation, it's possible to rebuild your credit a bit more quickly with a few techniques.

How Long Does it Take to Rebuild Credit?

Now you may be wondering how long it will take to build your credit back up. Sadly again, the answer is that it could take a (long) while. How many years depends on what your current credit score is and what steps you are taking to rebuild it.

For example, someone with a 550 credit score is in the “poor credit” range. But, if their goal is to get a low-downpayment FHA loan for a house, they only need to get it to 580. Lifting a credit score by 30 points may not take that long.

However, other credit scores may be lower due to things like previous bankruptcy. In that case, such a person may have to wait seven years before that bankruptcy falls off their credit report.

Wherever you fall in terms of “bad credit,” you must realize that rebuilding that credit may likely take years…sorry. It's a marathon and not a sprint. But I've got some recommendations below for rebuilding your credit as quickly as possible.

What Do I Need to Do to Build or Improve My Credit?

Monitor Your Credit

Want to get a credit boost? Our first recommendation is the simplest. However, it's also the most important thing you can do!

You need to sign up for a credit monitoring service. Many of these services are completely free and help you review your credit from month to month. I use Credit Karma.

These services can tell you what your credit “score” is on the most basic level. This lets you know how bad things really are and how far you must go to meet your goals.

Additionally, these services will recommend ways to increase your credit score. That information, on top of our guide, can help you formulate a “game plan” for your credit score.

Finally, you can use credit monitoring to discover potential errors on your credit file. You can instantly boost your credit score by reporting these errors to the relevant credit agencies.

The Authorized User Technique

Another lesser-known credit trick is becoming an authorized user. Basically, you ask someone (like parents or other family members) if you can become an authorized user on one of their credit cards.

Once you are authorized, your credit score will benefit from your credit history (on that card). If you use the right card (like Citibank, for example), they will report the main users' limit and credit history of that card to your report.

In addition to repairing bad credit, this is a great way for younger people to jumpstart their credit history. Plus, the card owner can just keep your card in their drawer, so you don't “accidentally” spend any money on it.

Pay the Right Debts Down

Generally speaking, you can improve your credit by paying your debts down. If you want to rebuild your credit much quicker, you must pay the right debts first.

For example, a full 30% of your credit score comes from credit utilization. In this case, “utilization” determines how much you use individual cards and your overall available credit.

You should use no more than 30% of the available credit for each card to have good credit utilization. To achieve this, you can selectively pay down your debts and accept credit increases when available.

Long story short? It may be tempting to try to pay down certain cards entirely. However, your credit may get a bigger boost, and sooner, from moving to a new card as soon as one of them hits the target utilization.

Get More Credit!

It sounds a bit counterintuitive, but as I just mentioned, one of the biggest factors in your credit score is the percentage of used credit vs. available credit. The lower the percentage, the better.

So if you can increase the amount of credit you have (and not utilize it), then your percentage of used credit will improve.

Credit karma will happily recommend credit cards to you (because they get a commission…duh), and they will filter them by certain criteria. One of those criteria is “most likely to get approved with poor credit”!

Use a Secured Credit Card

A secured credit can help someone repair their credit score no matter how low it is. So if it's really bad, this is the best way to go.

Most credit cards are “unsecured.” That means you don't have to put down any kind of collateral before using the card, and you can spend any amount up to the limit on the card.

With a secured card, you must first make a deposit (typically of at least $100). And in most cases, the amount that you deposit is your credit limit for the card.

Getting approved for a secured card is easy because the other party has nothing to lose. If you should fail to make payments, they can always take what they are owed from your initial deposit.

Meanwhile, you get all the credit benefits of a regular credit card from a secured card. Regularly using it and paying off your monthly debt can build your credit back up.

Pay Bills on Time

Our last piece of advice is a lot like our first piece. That means it is simultaneously very simple and very, very important!

You need to pay your bills on time each month. Even if you never outright miss a payment, a history of late payments will negatively affect your overall credit score. And a late payment will stay on your record for two years!

Conversely, if your score is low because you regularly miss payments, you can really boost it by making payments on time. One of the best ways to do this is to enroll in an “auto-pay” feature that automatically takes your payment on the due date.

Speaking of dates, you may be able to contact the lender and change the regular due date to a different point in the month. When all your payments are due around the same time, it becomes harder to miss a payment!

The Credit You Deserve: What Comes Next?

Now you have an answer to the question, “How long does it take to build credit back?” But do you know who can provide ongoing financial advice?

My mini-courses have all the info you need regarding finance, business, real estate, and more. To control your finances better, all you have to do is subscribe!

Lastly…don't forget that if you own a business, you should get a business credit card that is not connected to your personal credit! This way, you can run up a balance if need be, and it won't bring down your personal score.

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How Long Does It Take to Build Credit: Improving Your Credit Score 101 (2024)

FAQs

How Long Does It Take to Build Credit: Improving Your Credit Score 101? ›

Whatever your reason for wondering how long it takes to get a credit score, you can generally expect it to take about six months – and usually longer to get into the good-to-exceptional credit score range.

How can I improve my credit score 101? ›

Buy items wisely and try to pay your credit in total on those cards with high interest rates. Many credit scoring models look at how close you are to being “maxed” with your available credit. Try to keep your balances low compared to your total credit. Scores improve when you have a long history of credit and payments.

How long does it take to raise a credit score of 100 points? ›

In fact, some consumers may even see their credit scores rise as much as 100 points in 30 days. Steps you can take to raise your credit score quickly include: Lower your credit utilization rate. Ask for late payment forgiveness.

How long does it take to build credit as a beginner? ›

How long does it take to build credit from 0? It generally takes three to six months to get your first credit score, although the time it takes to build good credit is different for everyone. It depends on factors like what your credit scores are now, how you're managing debt and more.

How long does it take to go from 500 to 700 credit score? ›

The time it takes to raise your credit score from 500 to 700 can vary widely depending on your individual financial situation. On average, it may take anywhere from 12 to 24 months of responsible credit management, including timely payments and reducing debt, to see a significant improvement in your credit score.

How to go from 0 to 700 credit score? ›

How do I get a 700 credit score in two months?
  1. Dispute errors and negative marks on your credit report.
  2. Continue making all of your payments on time and avoid applying for new credit.
  3. Reduce your credit card balances by paying them off or getting a consolidation loan.
  4. Keep old credit cards open after paying them off.
Jan 18, 2024

How to get a 900 credit score in 45 days? ›

Here are 10 ways to increase your credit score by 100 points - most often this can be done within 45 days.
  1. Check your credit report. ...
  2. Pay your bills on time. ...
  3. Pay off any collections. ...
  4. Get caught up on past-due bills. ...
  5. Keep balances low on your credit cards. ...
  6. Pay off debt rather than continually transferring it.

How fast can a credit score go up? ›

The length of time it will take to improve your credit scores depends on your unique financial situation, but you may see a change as soon as 30 to 45 days after you have taken steps to positively impact your credit reports.

What credit score do you start with? ›

Instead of starting from the bottom, you'll actually start with no credit score instead — and that's not as bad as you might think.

How to repair credit fast? ›

How to improve your credit score
  1. Check your credit report for errors. ...
  2. Prioritize paying on time. ...
  3. Work to pay down your debts. ...
  4. Become an authorized user. ...
  5. Request a credit line increase. ...
  6. Handle debt in collections. ...
  7. Consider opening a secured card. ...
  8. Get credit for other payments.
Apr 30, 2024

What credit score is needed to buy a car? ›

The credit score required and other eligibility factors for buying a car vary by lender and loan terms. Still, you typically need a good credit score of 661 or higher to qualify for an auto loan. About 69% of retail vehicle financing is for borrowers with credit scores of 661 or higher, according to Experian.

Why is my credit score going down when I pay on time? ›

Using more of your credit card balance than usual — even if you pay on time — can reduce your score until a new, lower balance is reported the following month. Closed accounts and lower credit limits can also result in lower scores even if your payment behavior has not changed.

Can you build credit in 3 months? ›

However, it is possible to build credit in three months by taking steps to pay down your debt or cut your spending.

Is 650 a good credit score? ›

As someone with a 650 credit score, you are firmly in the “fair” territory of credit. You can usually qualify for financial products like a mortgage or car loan, but you will likely pay higher interest rates than someone with a better credit score. The "good" credit range starts at 690.

Why did my credit score go from 524 to 0? ›

Credit scores can drop due to a variety of reasons, including late or missed payments, changes to your credit utilization rate, a change in your credit mix, closing older accounts (which may shorten your length of credit history overall), or applying for new credit accounts.

Is 700 a good credit score to buy a house? ›

Yes. Assuming the rest of your finances are solid, a credit score of 700 should qualify you for all major loan programs: conventional, FHA, VA and USDA loans all have lower minimum requirements, and even jumbo loans require a 700 score at minimum.

How can I raise my credit score 100 points? ›

  1. Pay credit card balances strategically.
  2. Ask for higher credit limits.
  3. Become an authorized user.
  4. Pay bills on time.
  5. Dispute credit report errors.
  6. Deal with collections accounts.
  7. Use a secured credit card.
  8. Get credit for rent and utility payments.
Mar 26, 2024

How can I improve my credit score with little credit history? ›

Some of the best ways to improve your credit score quickly when you have no credit history include becoming an authorized user, opening secured credit cards, or getting a small loan in your name.

What is #1 factor in improving your credit score? ›

1. Payment History: 35% Making debt payments on time every month benefits your credit scores more than any other single factor—and just one payment made 30 days late can do significant harm to your scores. An account sent to collections, a foreclosure or a bankruptcy can have even deeper, longer-lasting consequences.

How to increase credit score 100 points in 1 month? ›

You can raise your credit score 100 points in 30 days by disputing errors on your credit report, paying off past-due accounts, and lowering your credit card utilization. Creditors typically report updated information monthly, so it is possible to improve your score by 100 points in 30 days.

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