Building credit takes about 3 to 6 months to get a first score and longer to build a strong one.
Timeline
You can get your first credit score after about 3 to 6 months of credit history. FICO needs at least one account open for 6 months. VantageScore can score you sooner.
Steps
- Open a secured card or become an authorized user.
- Use credit builder loans.
- Pay on time every month (payment history is 35 percent of FICO).
- Keep utilization below 30 percent (ideally under 10).
- Don’t open many accounts quickly.
Score ranges
FICO 300 to 850. Good is 670 to 739.
Strong credit
Takes 1 to 2 years or longer.
Check
Free reports at annualcreditreport.com.
Note
Experian Boost can add on-time utility payments.
How credit scores are calculated
FICO scores run from 300 to 850 and weigh five factors: payment history (35%), amounts owed or utilization (30%), length of credit history (15%), credit mix (10%) and new credit (10%). VantageScore uses similar factors with different weights. Lenders pull scores from the three bureaus, Equifax, Experian and TransUnion, and the numbers differ slightly between them.
Timeline in detail
- You need at least one account reported for 6 months to generate a FICO score. VantageScore can score you after 1 month.
- After 6 months of on-time payments, most people have a starting score in the 600s.
- A score of 670 to 739 is rated good, and many people reach it in 12 to 24 months with steady habits.
- A score of 740 or higher, rated very good to exceptional, typically takes 3 to 7 years, because age of accounts counts.
- Negative items such as late payments stay on reports for 7 years, and bankruptcies for 7 to 10 years.
Steps to start
- Open a secured credit card with a deposit of $200 to $500, or become an authorized user on a family member’s old account.
- Take a credit-builder loan from a credit union or lender that reports to all three bureaus.
- Use Experian Boost, which adds utility and streaming payments to your Experian file.
- Pay every bill on time. Autopay for at least the minimum prevents late payments.
- Keep card balances under 30% of limits, and under 10% for the best scores.
- Do not close your oldest account.
- Apply only when needed, as each hard inquiry may lower a score by a few points for up to a year.
Score ranges
FICO ranges: 300 to 579 poor, 580 to 669 fair, 670 to 739 good, 740 to 799 very good, 800 to 850 exceptional. The average US FICO score was about 715 in 2023.
Strong credit
A score above 740 usually qualifies for the best mortgage and auto loan rates. On a $300,000 30 year mortgage, a score of 760 can get a rate roughly 0.5 to 1 percentage point lower than a score of 640, saving tens of thousands of dollars over the loan.
Check your credit
Under federal law you can get free weekly reports from each bureau at AnnualCreditReport.com. Dispute errors with the bureau in writing. Checking your own report does not hurt your score.
Note
There is no way to build good credit instantly. Credit repair companies cannot remove accurate negative items, and the FTC warns about scams that promise quick results for a fee.
Credit score factors
FICO scores range from 300 to 850 and are based on payment history (35 percent), amounts owed (30 percent), length of credit history (15 percent), new credit (10 percent) and credit mix (10 percent). You need at least one account that is at least 6 months old and reported within the past 6 months to get a FICO score. A good score is 670 to 739, very good 740 to 799 and exceptional 800 or more. Becoming a authorized user on a family member’s old account, a secured credit card and a credit-builder loan can start a history. Keep credit utilization under 30 percent, ideally below 10 percent, and pay on time. Check reports free at AnnualCreditReport.com.
Based on data from FICO and the Consumer Financial Protection Bureau
