Key Takeaway: Building credit a good credit score can take more than a year of consistent, on-time payments and credit habits, but generating a credit score is typically a faster process. FICO scoring models require at least six months of credit history reported to the credit bureaus to generate a score, but VantageScore needs just one month of credit history reported to the bureaus to generate a score.
If you’re just getting started with credit, it will take you at least one account and one month of credit history reported to the credit bureaus to generate your first VantageScore® 3.0 or 4.0 scores. For FICO® scoring models, you will generally need at least one account and six months of credit history to receive a score.
Building that initial score into good or excellent credit could take a year or more, depending on your starting point and how you manage your accounts. If you’re trying to improve your credit, it might take even longer.
If you’re tracking your financial progress, Credit Karma provides free credit reports from TransUnion and Equifax, as well as free VantageScore® 3.0 credit scores from those two bureaus. Monitoring your reports and scores regularly can help you build your credit month to month or even year to year.
- How quickly can you build credit from scratch?
- How long does it take to rebuild credit?
- What factors make up my credit scores?
- How can I build credit faster?
- Next steps: Monitor your progress
- FAQs about building credit
How quickly can you build credit from scratch?
Building credit from scratch can take more than a year. Starting “from scratch” usually means you have no credit history at all, or you have a thin credit file — meaning you don’t have enough history yet to generate a score.
The timing depends on the scoring model:
- VantageScore credit scores: VantageScore credit scores, including the VantageScore® 3.0 credit scores you see on Credit Karma, only require one account and one month of credit history reported to the bureaus.
- FICO scores: To generate a score, FICO models generally require credit history reported to the credit bureaus from at least one account that’s been open for at least six months. You’ll also need at least one account reported to the credit bureaus within the past six months.
But having a score and having good credit are two different things. Once you have a score, moving into the “good” range may take a year or more of on-time payments and good credit-building habits, and reaching excellent credit can often takes years of steady history.
How do I build credit?
There are several ways to build credit. A few common tactics include:
- Opening a secured card or credit-building card: These cards are designed for people new to credit or rebuilding credit. Secured credit cards require refundable security deposits to open but are typically easier to qualify for than other types of cards.
- Opening a credit-builder account: Unlike a traditional loan, you don’t get the money from a credit-builder account upfront. Instead, you make payments, typically into a savings account, that are reported to the credit bureaus. Once you reach a specified amount, those funds are released to you. Credit Karma’s Credit Builder plan can help you grow your savings while also building credit.
- Signing up for bill reporting services: These types of services, like Credit Karma’s Credit Spark™, report bill payments for accounts that aren’t typically added to your credit reports, like your utility or phone accounts. By adding this credit history to your credit reports, you can make your credit file more robust.
- Becoming an authorized user on a trusted person’s account: Instead of opening your own credit card account, a trusted friend of family member could add you to their account as an authorized user. You’d then benefit from that account’s good payment history and credit usage. But, if the primary cardholder misses payments or otherwise mismanages the account, your credit could suffer, as well.
How long does it take to rebuild credit?
It could take several months to over a year to rebuild credit. How long it takes depends on what’s currently on your credit reports and how you manage your accounts going forward.
Many derogatory marks, like late payments, can stay on your credit reports for up to seven years — and some marks, like bankruptcy, can be on there for up to 10 years. These marks affect how quickly you’re able to rebuild your credit. Someone with a few late payments, for example, may be able to rebuild their credit faster than someone who’s gone through bankruptcy.
No matter what type of derogatory marks you have on your credit reports, their impact on your credit scores will fade as the marks age and as you add positive history to your reports.
Here’s how long other common derogatory marks generally stay on your credit reports:
| Derogatory mark | Time on credit reports |
|---|---|
| Late payment | 7 years |
| Collections account or charge-off | Up to 7 years |
| Bankruptcy | Up to 10 years |
| Debt settlement | Up to 7 years |
| Repossession | 760 |
| Foreclosure | Up to 7 years |
What factors make up my credit scores?
Your credit scores are calculated by considering the information on your credit reports. FICO and VantageScore each weigh that information a bit differently depending on the scoring model being used, but the general credit score factors that go into both are similar.
Here are the five main factors that make up your credit scores:
- Payment history —This factor carries the most weight to both FICO and VantageScore because lenders want to see that you pay your bills on time. Even a single reported late payment can cause your credit scores to drop.
- Credit usage (utilization) — This measures how much of your available revolving credit you’re using at any given time, usually shown as a percentage. Experts recommend keeping your credit utilization rate below 30% to avoid damaging your credit scores.
- Length of credit history —This factor looks at the average age of your accounts, the age of your oldest account and the age of your newest one. A longer track record tends to help.
- Credit mix — Scoring models look at the variety of credit types you manage, such as credit cards and installment loans like auto or student loans. Showing you can handle different types can be a plus, but it’s not a requirement to build credit.
- New credit — This reflects recently opened accounts and recent applications for credit that resulted in hard inquiries. Opening several accounts in a short span can signal to lenders that you’re overextended and can temporarily bring down your scores.
A late payment affects your credit scores only after it’s been reported to the credit bureaus, which typically happens once you’re 30 days or more past due. If you miss a due date, paying it off as quickly as you can — ideally before it’s 30 days past due —can help you avoid damage to your scores.
How can I build credit faster?
Credit scores are designed to grow over time as you add to your credit history, so patience and consistency tend to do more than any single quick fix. But, while there are no shortcuts to establishing a solid credit history, there are some steps you can take to help your credit build faster.
Develop consistent credit-building habits
To build a strong credit history month after month, start with these credit-building habits:
- Pay every bill on time so that you build a positive payment history.
- Keep your credit utilization below 30% and avoid maxing out your credit cards.
- Keep older accounts open so the length of your credit history keeps aging.
- Space out applications for new credit by instead of opening several new accounts at once.
- Review your loan and credit card statements to help you catch errors and keep an eye on your balances.
- Dispute any errors you find with the credit bureaus to get the information corrected in your credit reports before the errors cause further damage to your scores.
Report bills you already pay
Some third-party tools, such as Credit Karma’s Credit Spark™, can report eligible bill payments to the major credit bureaus. These bills can include utility payments, phone bills and more.
Doing this can make your credit history more robust, but it’s not guaranteed to boost your credit scores.
Open a credit-builder account
A credit-builder account is designed to help you build or rebuild credit. Unlike a traditional loan, the money isn’t given to you right away. It’s typically set aside while you make monthly payments to the company, which reports these payments to the credit bureaus. Once your payments equal the amount of the loan, the money is released to you.
Credit Karma’s Credit Builder plan works a little differently than a credit-builder loan. When you open the Credit Builder plan, Credit Karma will open a line of credit and a savings account in your name. You’ll decide how much money you want to save each pay period. That set amount of money will then be transferred from your line of credit into your savings account. You’ll then pay off the line of credit, and your payment will be reported to the credit bureaus.
Once you’ve saved at least $500, that money becomes available for you to use, allowing you to build savings and credit history at the same time.
Next steps: Monitor your progress
Checking your credit reports and credit scores regularly helps you see your progress and spot errors that could be holding you back.
You can check your TransUnion and Equifax credit reports, along with your VantageScore® 3.0 credit scores from those credit bureaus, for free through Credit Karma. If something looks off, you have the right to dispute the error with the credit bureaus.
FAQs about building credit
While you can’t typically build a robust credit file in 30 days, you may be able to establish a credit score in that time. Some VantageScore models, like VantageScore® 3.0, generally only need one account and one month of credit history reported to the credit bureaus to generate a credit score. FICO® models typically need one account with recent credit activity and at least six months of history reported to the bureaus to generate a score.
Credit scores reward patterns over time, not one-time actions. A track record of on-time payments builds up gradually, which is why it can take a while to build credit. Derogatory marks on your credit reports, like late payments or accounts in collections, can also mean you’ll need more time to rebuild your credit.
Instead of starting at zero or at the bottom of a credit scoring scale, you start with no credit score at all. Once you establish some credit history, you’ll have many credit scores, each one based on the information in your credit reports and calculated with a specific scoring model.
The fastest way to build credit is to consistently pay your credit bills on time, every time. Keeping your credit utilization low and using tools that report bills you already pay, such as Credit Karma’s Credit Spark™, may also help you establish and build your credit quickly.