How Long Does It Take to Build Credit?

Casey Bond

How fast can you improve your credit score? If you need to borrow money but have poor credit -- or no credit score at all -- it can feel like an eternity before the number is acceptable to lenders. With positive changes in your credit managing habits, you can see credit score improvements occur in as little as one month.

But exactly how long does it take to repair credit or even build it from scratch? Here's what you need to know.

How Long Does It Take to Build Credit From Scratch?

For a score to be generated, FICO requires that you have a minimum of one credit account that's been open for six months or more and at least one account with activity that's been reported to the credit bureau within the past six months. It's possible for one account to satisfy both of those requirements.

[Read: Best Credit Cards for Bad Credit.]

FICO's third requirement for generating a credit score is that there can't be any indication on your credit reports that you are deceased. That might sound strange, but it can happen if you shared an account with someone who was reported deceased.

As far as what your score will be once it's generated, "it will depend on how many accounts you open, as well as how much you're using your credit," says Leslie H. Tayne, debt resolution attorney at Tayne Law Group in New York and author of the money management book "Life & Debt."

"When you're first building credit, it's important to start off on the right foot, so make sure you can make all your payments on time every time and try to pay down your balances in full," Tayne says. Overextending yourself right off the bat will only lengthen the credit building process.

How Long Does It Take to Improve Your Credit Score?

The timeline can be tricky for improving a bad credit score. It will largely depend on how bad your credit is to start. "If you're dealing with some serious damage, it could take several years to build it back up," Tayne says.

For example, serious negative marks such as a collection account, foreclosure or bankruptcy will stay on your record for about seven years. Even so, their impact will fade with time. A collection account that is five years old, for instance, will drag down your score much less than one that's just five months old, according to FICO.

[Read: Best Starter Credit Cards.]

The good news is that when your score is low, each positive change you make is likely to have a significant impact. For instance, going from a poor credit score of around 500 to a fair credit score takes around 12 to 18 months of responsible credit use.

Once you've made it to the "good" credit zone, don't expect your credit to continue rising as steadily. "It can be more challenging to improve your score the higher it gets," Tayne says. "Once you're into the 700 to 800 tier, you've established very good credit habits, and therefore, it can be more difficult to have actions that drastically change that -- you don't have as much room for improvement, so to speak."

On the other hand, it's much easier for your credit score to drop a tier once you're at a stable score, so keep up those good habits.

Ways to Quickly Fix Your Credit

Whether you've never had a credit score before or would like to see your score improve, there are steps you can take to give your credit a boost. It might seem overwhelming, but tackling one area of focus at a time can help you see continued improvement.

"There are a lot of moving parts in your credit score, which means there are a lot of opportunities to improve your score," says Richard Best, owner of financial services consulting firm RT Best Consulting. In fact, some of these strategies can help you see improvement in your score in as few as 30 days.

Know where you stand. You can't improve your score if you don't know what it is. To find out if you even have a credit score, check whether you have credit reports on file with the credit bureaus. Best says that by law, you're entitled to request a free credit report from each of the major credit reporting agencies once a year through AnnualCreditReport.com. However, credit reports don't show your score; to see your actual credit score for free, you can check with your credit card company or free consumer services.

[Read: Best Credit Cards for Fair Credit.]

Establish a credit account. If you don't have a credit score yet, you'll need to get your hands on credit and start building one. Of course, that can lead to a chicken-and-egg scenario -- how can you get credit without a credit score? Fortunately, there are ways. For example, try having a family member add you as an authorized user on one of their credit cards. You can also open a secured credit card, which are designed for people with poor or no credit, or take out a credit-builder loan.

Do some credit report housecleaning. Many credit reports contain errors such as missing accounts, incorrect credit limits and even wrong Social Security numbers, which can drag your score down. By law, the credit bureaus must correct errors, Best says, so dispute errors for an easy improvement to your score.

Lower your utilization. One of the fastest ways to increase your credit score is to reduce your credit utilization ratio. You can do this is by paying down an existing debt, ideally below 30% of your limit, though any reduction in your outstanding balance helps. The other option is to ask for an increase of your credit limit. The key here is that you can't accumulate more debt, too, otherwise your ratio won't improve.

Make every payment on time. Payment history is the most influential FICO credit score factor, so missing payments is one of the easiest ways to impair your credit. Making an effort to pay bills in full and on time will have the opposite effect. "As your reported missed payments recede into history, your score will gradually increase," Best says.

Apply for new credit sparingly. Finally, it can be tempting to apply for more credit to boost your score, but it's possible to go too far. "You will slow the growth of your credit score by trying to open (too many) new credit accounts," Best says. Start with just a couple of accounts and manage them responsibly for a year or two before taking on more.


Casey Bond is a seasoned personal finance writer and editor. Her work has appeared in a number of major national publications including U.S. News & World Report, Yahoo Finance, MSN, The Huffington Post, Business Insider, Forbes and others. Follow her on Twitter @CaseyLynnBond.