How Long Does It Take To Build Credit from Nothing? (2024)

Building credit is an extremely important step to adulting like a pro. Your credit score is a report card of sorts that credit card issuers, mortgage lenders, auto loan officers, etc., all examine before deciding to give you the money you need to make huge advances in life.

But how long does it take to build excellent credit? And how can you build credit when you have none to begin with?

Whether you’re fresh to the credit world and building up from scratch or re-entering after bankruptcy, building your credit from the bottom takes time. But there are things you can do to expedite the process, and steps you can take to avoid common pitfalls that might set back your progress. Let’s take a look.

How long does it take to build a credit score?

If you’re building credit from nothing, you can generally achieve some kind of credit score within three to six months. In fact, you can find yourself with a relatively decent score within a year. For example, I was able to get approved for the Chase Sapphire Preferred® Card after just one year of building my credit.

What does “building credit” even mean?

If you’ve got any sort of credit line at all, be it a credit card, personal loan, etc., you are building credit. You’re bolstering your credit history, giving banks and other lenders more information on how responsible you are with credit.

Note that just because you’re building credit doesn’t necessarily mean you’re building good credit. If you’ve got bad habits, such as missing payments and running up your credit card balances (we’ll talk about this stuff in a bit), you’re not doing yourself any favors.

To build good credit, you need to exhibit a streak of healthy financial habits that make lenders literally want you to borrow their money.

What’s a “good” credit score?

In truth, many lenders have different definitions of what is good credit score and what is a bad one. However, FICO is perhaps the ultimate authority on credit scores — and it identifies the ranges as follows:

  • 300-579 — Very poor
  • 580-669 — Fair
  • 670-739 — Good
  • 740-799 — Very good
  • 800-850 — Excellent

I recommend that you don’t apply for premium (or even mid-range) credit cards until your credit score is at least 700. That’ll give you a good chance of being approved.

Plus, you’ll have also shown yourself that you can routinely perform positive financial acts — and therefore be responsible enough to handle credit.

5 ways to build credit from nothing

So, what if you’ve got no credit at all? How long does it take to build credit from nothing?

If you’re starting from scratch to build your credit history for the first time, you’ll have a history long enough to be scored within three to six months.

But since you typically can’t get access to credit without alreadyhaving a credit score first, here are some ways to break into the world of credit:

1. Get a jumpstart with the help of a cosigner

I personally remember how hellacious it was to get an auto loan with no credit. No lender is eager to fork over $10,000 to someone they know almost nothing about.

While most loans are extremely difficult to get without a credit score, you can be approved for just about anything if you’ve got a cosigner with good credit. That’s because when you’ve got a cosigner, the lender will examine their credit and approve you based on that. If you default on your loan, it’s the responsibility of the cosigner to pay.

2. Open a secured credit card

Without a credit score, you’re going to have a near impossible time convincing a credit card issuer to let you open a card.

Without a credit score, you’re going to have a near impossible time convincing a credit card issuer to let you open a card.

However, many banks offer “secured” credit cards that do not require a preexisting credit history. In short, you agree to let the bank hold a specific amount of money as collateral. They will then give you a credit card with a credit limit identical to the amount of money you’ve given them.

This eliminates the need for them to trust you. If you can’t repay your credit card balance, the bank will simply use your own money to pay the debt.

When you finally acquire a credit score and can be approved for non-secured credit cards, you can get rid of your secured card and the bank will return your money to you.

3. Piggyback as an authorized user

An authorized user is someone who is added as a secondary cardholder to someone else’s credit card. For example, if your parents have a credit card, they can add you as an authorized user, and you can use their credit limit.

One huge benefit of being added as an authorized user is that you will benefit from the primary cardholder’s good credit habits. The credit card will appear on your personal credit report.

This means if you can find someone with good credit that’s willing to add you to their credit card, you can build good credit by literally doing nothing. You don’t even have to spend on the card — they can just add you to the account and cut up the authorized user card when it shows up.

4. Open a credit builder loan

Credit builder loans aren’t typical loans, as they’re designed specifically to help you build credit. They tend to be for quite small amounts (think: less than $1,000), and therefore reduce your risk of sinking into unmanageable debt. The point of credit builder loans is not necessarily to borrow money in order to buy something, rather to borrow money JUST for the sake of paying it back and having those payments reported to the credit bureaus.

Some people, understandably, balk at the idea of paying a company interest and/or fees to borrow such a small amount of money. Nevertheless, we think you should know the option exists.

If a credit builder loan is of interest, Self is one product to look at.

5. Use a credit “boosting” service

It’s unfortunate that most of us do not get any “credit” for the bills nearly all of us pay, like rent and utilities. For a fee, there are services that can change that.

Experian Boost is a subscription service that can help you build credit by making certain rent or utility payments. Cushion.ai is another that provides a way to build credit as you pay “Buy Now, Pay Later” installments with companies like Affirm or Klarna.

How to maintain good credit

Building credit can be a lengthy process. It takes time and dedication — years, even — to build excellent credit. It won’t happen overnight, but it will happen. As long as you cultivate and stick to the right habits, you’ll be able to pull up your score.

Always make payments on time

If you remember nothing else, remember this: late payments will be the death of your credit score.

No matter what, be sure to make payments on time. Even if you are unable to pay off your credit card each month, at least make the minimum payment. If you don’t, a “delinquency” will appear on your credit report, which tells lenders that you’re the kind of person who doesn’t repay your debts.

Doing this just once or twice can cause your credit score to freefall. And credit histories have long memories — things like missed payments will stay on your record for seven years, while bankruptcies will be on there for up to 10. If you’re looking for full credit recovery, you’re looking at a much lengthier process.

Keep your balances low

A big part of your credit score is “credit utilization.” Banks like to see that you’ve got a lot of credit available to you, but you’re not using much of it. If you’ve got a total of $30,000 in available credit, but a balance of $29,000, the banks will probably see that as extremely risky. It shows that you’re not living below your means.

Don’t cancel credit cards (unless there’s an annual fee)

Another part of your credit history that you should mind is your “credit history.” This is calculated based on the mean average of the lengths of your currently active credit lines.

For example, if your only loan is a credit card you’ve had for five years, your average credit history is five years. But if you open a credit card tonight, your average credit history will become 2.5 years.

The longer your average credit history, the better your credit score.

Don’t frequently apply for new credit

This is loosely tied to the previous point about credit history, but it goes a bit deeper.

When you apply for new credit, the lender will perform a “hard inquiry” on your credit report. Basically, they are checking your credit to see if you’re too risky to be given a loan. Hard inquiries temporarily reduce your credit score slightly.

If you’re applying for new credit all the time, you’ll have loads of credit inquiries on your credit report. Then, when a lender is examining your credit, they may infer those credit inquiries as financial trouble. Someone constantly applying for more credit can look suspicious.

Summary

Building some credit can be done in a matter of months. Building excellent credit, however, is a process that takes years. The trick is to avoid getting discouraged. Cultivate and stick to your good spending and payment habits, and avoid the actions that will leave black marks all over your credit history.

Having very good credit can potentially unlock virtually any loan you’ve got your eye on — not to mention the best rates and the best terms possible. Even if it takes years of effort and commitment, don’t you think that’s worth it in the end?

How Long Does It Take To Build Credit from Nothing? (2024)

FAQs

How Long Does It Take To Build Credit from Nothing? ›

How long does it take to build credit? Every person's credit journey is unique but FICO and VantageScore, the two major credit scoring models, generally require two to six months of credit activity to generate a credit score. If you're starting from scratch, it may take a bit longer to achieve a good credit score.

How long does it take to build a credit score from nothing? ›

Paying on time every month, keeping your credit utilization low and having a mix of different credit can help build your scores over time. If you have little or no credit history, it may take three to six months of credit activity to get your first credit scores.

How long does it take to build your credit score from very poor? ›

Depending on your unique financial situation, it can take anywhere from one month to a few years to improve your credit score. Improving your credit score isn't something you can achieve overnight, but don't let that dishearten you. Every credit score can be improved with a little commitment and perseverance.

How fast can you realistically build credit? ›

How soon can you see improvement? The length of time it will take to improve your credit scores depends on your unique financial situation. At the earliest, you may see a change between 30 and 45 days after you have taken steps to positively impact your credit reports.

Will my credit score go up if I do nothing? ›

As long as you make your payments on time, your credit scores will tend to increase, even if you do nothing else. Reduced borrowing limit: If you go a long time without using a credit card, the lender could close the account or lower its borrowing limit.

Is it true that after 7 years your credit is clear? ›

Most negative items should automatically fall off your credit reports seven years from the date of your first missed payment, at which point your credit score may start rising. But if you are otherwise using credit responsibly, your score may rebound to its starting point within three months to six years.

How to get a 720 credit score in 6 months? ›

Success in credit building requires consistency. Make all payments on time, keep credit utilization low, and give it time. Kikoff's tools provide an easy framework, but your financial behavior is ultimately the cornerstone of improvement.

What builds credit the quickest? ›

Become an authorized user

One of the fastest ways to build credit is by becoming an authorized user on someone else's card, like a family member or close friend. You can piggyback off the primary cardholder's credit and establish your credit history.

What credit score is needed to buy a house? ›

The minimum credit score needed for most mortgages is typically around 620. However, government-backed mortgages like Federal Housing Administration (FHA) loans typically have lower credit requirements than conventional fixed-rate loans and adjustable-rate mortgages (ARMs).

Should I pay off my credit card in full or leave a small balance? ›

It's a good idea to pay off your credit card balance in full whenever you're able. Carrying a monthly credit card balance can cost you in interest and increase your credit utilization rate, which is one factor used to calculate your credit scores.

Can I buy a house with a 700 credit score? ›

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.

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.

What credit score do you start with? ›

There isn't a set credit score that each person starts out with. Instead, if you don't have any credit history, you likely don't have a score at all.

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 long does it take to get a 700 credit score if you have no credit? ›

Starting with zero credit history, you can establish credit in as little as six months. Achieving a "good" credit score of 700 or better usually requires making timely payments for at least 18 months to two years, but it's possible to find shortcuts.

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