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How Long Does It Take to Build Credit?

Your credit report is a document that contains all of your credit-related information, including your credit score. Your credit score is calculated by a formula and used by creditors to predict your “risk” factor. Lower credit scores signify whether you are a high-risk borrower or not, and can also determine your approval for a loan.

So how do you build your credit score? First, you need to understand what factors go into creating your score.

Understanding Your Score

Your credit score is calculated by a formula that can be broken down into five different parts. While each part has an impact on your overall score, some are more important than others. Here’s a breakdown:

  • Payment history (35%)
  • Outstanding debts (30%)
  • Credit history (15%)
  • New credit (10%)
  • Credit in use (10%)

Your credit score will be in the form of a three-digit number, ranging from below 530 to above 730. The higher your score, the better your credit. For instance,

  • Scores below 539 = Very poor credit
  • 540 to 589 = Poor credit
  • 590 to 669 = Fair credit
  • 670 to 729 = Good credit
  • Scores over 730 = Very good credit

Improving Your Score

If you are just starting out or looking to improve your credit score, there are a number of things you can do to make those three little digits rise. These can include:

  • Paying your bills on time every month
  • Keeping balances low on credit cards
  • Applying and opening new credit lines only when absolutely necessary
  • Paying off your debt, instead of transferring it to a new card or loan
  • Keeping unused cards open, as a closed card can negatively affect your credit score

It Takes Time

There are no quick fixes when it comes to fixing or building your credit score. Time, good spending habits and the methods we mentioned above are the necessary steps you should take when building your credit score. As for rebuilding or fixing your score, that doesn’t actually exist. You can’t “fix” a score, but you can rebuild your credit history after negative changes impact the score. Certain negative elements on your credit report, like bankruptcy, delinquency or collection accounts, remain on your score until a certain amount of time passes. For instance, inquiries remain on your report for two years and most public record items remain for seven years.

If you are struggling or feel burdened by your debt, it might be time to contact one of our credit counselors to help you.

Guide to Credit Reporting

All About Building Credit



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