How Long Does it Take to Build Credit?

Your credit score will have a drastic impact on your personal finances throughout your adult life. From getting a mortgage to landing the apartment of your dreams, credit affects many aspects of our lives — so it’s absolutely worth paying attention to. 

If you’re just getting started building credit, you might be wondering what’s in store. How long does it take to build credit? And how can you get started on the right path? 

How long does it take to get your first credit score?

It takes around 3 to 6 months of credit history to receive your first credit score, according to Experian (one of the three main credit bureaus). 

Credit scores are calculated based on information reported to the credit bureaus by lenders. To have information reported to the credit bureaus, you first need to have some sort of credit account open. This could include:

• A credit card

• Student loans

• A credit builder loan or secured credit card

• An auto loan

Once the account is open and in use, the lender will start reporting your credit usage to the credit bureaus. This data will include how much of your credit limit you are using, if you’re making payments on time, etc. Keep in mind that most bills (phone bill, internet, subscriptions, etc.) won’t count towards your credit score. Typically, only activity on loans and credit accounts will contribute to your credit rating. 

Remember, you need to use credit responsibly in order to build a positive credit history. The most important thing is to ensure you make your monthly payments on time. 

You can also start building credit by becoming an authorized user on someone else’s account (more on this later). 

What’s a good credit score to aim for?

A good credit score is generally considered to be a FICO score of 670 or above. 

These are the general ranges of credit score categories: 

• Under 580: Poor credit

• 580-669: Fair credit

• 670-739: Good credit

• 740-799: Very good credit

• 800 and up: Exceptional credit

The minimum credit score is 300, and the maximum is 850. 

Keep in mind that there’s no set “starting” credit score. You don’t start at 0, nor do you start at 300. Instead, you start with a score that reflects your initial usage of credit. If you use credit responsibly, you will start with a reasonable credit score — if you miss payments or default, you will start with a low score. 

How fast can you build credit?

It typically takes 3 to 6 months to get your initial credit score after opening a credit account. However, it can take several years to build up to a good credit score. 

The time it takes to build credit varies depending on how you use credit. If you have a variety of accounts — student loans and a credit card, for example — your credit will likely build faster than if you had only one account. 

What is the fastest way to build your credit?

One of the fastest ways to build credit is to become an authorized user on someone else’s account. This allows you to essentially piggyback off their good credit history. 

Of course, you will only benefit from being an authorized user if the other user has a positive payment history and good credit overall. 

Becoming an authorized user is discussed in greater detail below.

Tips to improve your credit score

Building good credit is a long process, but one that’s absolutely worth pursuing. Here are some general guidelines on how to improve your credit score when you’re just starting out. 

Become an authorized user

An “authorized user” is someone who is added to an existing credit account. For example, your wife could add you as an authorized user on her credit card. The card issuer would then mail you a credit card linked to that account. 

When you become an authorized user on an account, the credit history from that account will be reported to the credit bureaus under your name. So, if the original user has used their credit card responsibly, made on-time payments, etc., you will benefit from becoming an authorized user. 

Use a credit builder loan

A credit builder loan is a specialized loan product that’s designed specifically for building credit. You can apply for a credit builder loan with no credit history, as long as you have income. 

With a credit builder loan, the bank “loans” you a small amount of money, which is deposited into a locked bank account. You then make monthly payments until the loan amount is paid off. Once you pay off the loan, you can access the full amount in the locked bank account. 

Use a secured credit card

A secured credit card is a specialty credit card designed for building credit. They are available to applicants with little to no credit history. When you open a secured credit card, you must deposit the amount of the credit limit into a locked bank account. For example, if you’re given a $500 limit, you must deposit $500 into a bank account. 

From there, you can use the secured credit card for daily expenses. As long as you make on-time payments, you’ll start to build a positive credit history. Secured credit cards are one of the best ways to build credit with a credit card if you’re just starting out. 

Pay your bills on time

Payment history accounts for 35% of your credit score. That means that paying your bills on time is extremely important for building a positive credit history. Even a single late payment can ding your score.

To ensure you don’t miss a payment, it’s a good idea to set up automatic payments on your accounts.

Pay card balances off in full

Using credit cards responsibly is important for building good credit, and for saving money on interest. If you can, try to pay off your credit card statement balance in full each month. This way, you won’t pay anything in interest — and your credit score will benefit from a lower credit utilization rate. 

Avoid closing accounts

Lenders like to see that borrowers have a long history of using credit responsibly. One key metric they look at is the average age of accounts. This metric looks at all your open accounts and considers how long they have been open, on average. 

If you close an open account, it no longer counts towards your average age of accounts. This can ding your credit score. So, it’s best to keep old accounts open — even if you no longer use them. 

Avoid opening too many new accounts

While having a variety of credit accounts is a good thing, opening too many in a short period of time can be a red flag for lenders. It’s best to only open accounts when you actually need them. 

For instance, taking out a personal loan can help build credit. But unless you actually need that loan for a specific purpose, it’s not worth the cost.

Bottom line

So, how long does it take to build credit? It typically takes between 3 and 6 months of credit activity to get your initial credit score — and it can take much longer to get your score to where you want it to be. The best approach is to stay consistent and patient, and make sure you pay all your bills on time. 

If credit card debt is holding you back from achieving your financial goals, Tally† may be able to help. Tally is an app that helps qualifying Americans consolidate credit card balances into a lower interest line of credit. Learn how Tally works here. 

†To get the benefits of a Tally line of credit, you must qualify for and accept a Tally line of credit. Based on your credit history, the APR (which is the same as your interest rate) will be between 7.90% - 29.99% per year. The APR will vary with the market based on the Prime Rate. Annual fees range from $0 - $300.