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How Long Does It Take To Build Credit?

Andrew Dehan3-minute read
March 30, 2021

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The three-digit number that lenders use to evaluate the risk of lending you money is known as your credit score. Your credit score is based on how you’ve handled your finances in the past and predicts your ability to repay debt in the future.

With a high credit score, you can prove that you are a responsible borrower and know how to budget to repay your debts on time. If you have a high credit score, you’re more likely to get approved for a credit card or loan and land favorable terms than someone with a low credit score. In this article, we’ll show you what makes up your credit score, how long it takes to get one, and how to build your credit.

What Makes Up Your Credit Score

Most lenders use a FICO® Score to determine your risk. Your FICO Score is comprised of five factors including:

  • Payment history: The most important factor in your FICO Score is your payment history as it accounts for 35%. Any time you miss a payment, you can expect a negative effect on your credit score, so making timely payments is essential.
  • Credit utilization: The amount of available credit you’re using is known as your credit utilization. It’s 30% of your credit score and can be calculated by dividing your current debt balances by your total credit limits on each of your credit lines. If possible, try to keep your credit utilization to no more than 30% of your available credit. 
  • Length of credit history: Length of credit history refers to the amount of time each of your accounts have been open. In most cases, the longer your account has been open, the higher your credit score will be. This factor makes up 15% of your credit score.
  • Credit mix: Credit mix is the types of accounts that make up your credit history such as mortgages, credit cards, and installment loans. It accounts for 10% of your credit score. 
  • New credit: New credit refers to the amount of unique credit accounts you open and makes up 10% of your credit score. Since opening several new accounts in a short period of time can position you as a risky borrower, only open accounts when necessary.

What Is Your Credit Score If You Have No Credit?

If you’ve never been listed on a credit account, haven’t used credit in a while, or have only recently applied for credit or been added to an account, you may wonder about your credit score.

Contrary to popular belief, having no credit does not mean you have a 0 credit score. Since FICO Scores, which are the most widely used, range from 300 – to 850, your credit score will likely be somewhere under 500, once you begin to establish credit.

When Do You Get a Credit Score?

Fortunately, it doesn’t take long for a credit score to show up. According to Experian™, one of the three major credit bureaus, it takes 3 – 6 months of regular activity for a credit score to be calculated. This is great news if you’d like to apply for a loan so you can buy a car or home or make another major purchase soon and don’t want to have to wait forever. 

How Can I Build My Credit At 18?

If you’re 18 years old and have no credit score but would like to build your credit and earn a high score, there are several ways to make this happen. Here are some tips:

  • Get a starter credit card: A credit card is a great tool for building credit. If you have little to no credit, you have a few options, including an unsecured credit card, secured credit card (one that requires money down) or a student credit card that comes with low limits.
  • Make timely payments: Get into the habit of making timely credit card payments, as a positive payment history will help strengthen your credit score right away.
  • Obtain a small loan: If you need a car for college or have another valid reason for taking out a small loan, going this route will add to your credit mix and help you build a positive payment history as long as you make on-time payments. A credit-builder loan can also be an option under the right circumstances.

Check Your Credit Score On A Regular Basis

Once you’ve spent some time building up your credit, it’s a good idea to check your credit score with Rocket HomesSM regularly. With a bit of dedication and hard work, you can go from no credit score to a high credit score and set yourself up for financial success. Be sure to check out our other resources for building credit and personal finances.

Rocket HQSM has partnered with CardRatings for our coverage of credit card products. Rocket HQ and CardRatings may receive a commission from card issuers. Opinions, reviews, analyses & recommendations are the author’s alone, and have not been reviewed, endorsed or approved by any of these entities.

Andrew Dehan

Andrew Dehan is a professional writer who writes about real estate and homeownership. He is also a published poet, musician and nature-lover. He lives in metro Detroit with his wife, daughter and dogs.