How long does it take to build credit depends on a number of key factors that we’ll discuss in this article. Most noteworthy, we’ll highlight tips and methods that can be used right away to help you build credit from scratch. Also, we’ll touch on how to repair credit with negative marks on credit report.
Above all, the answer to the question of how long does it take to build credit is an interesting one. Most noteworthy, with the proper tools and knowledge, anyone can build and/or rebuild credit fast and responsibly.
First of all, building credit can be done in as little as three months. However, rebuilding credit is different. To clarify, depending on your current credit situation, it can take anywhere between six months to seven years to rebuild your credit. For instance bankruptcies, charge-offs and foreclosures could stunt the credit growth process early on. In contrast, missed credit card and loan payments can be rectified more quickly if the right assets are in place.
However, don’t worry. The tips highlighted below will help to accelerate those time frames and get you back to financial freedom in no time.
How Long Does It Take To Build Credit Initially
However, before we begin the process of rebuilding credit, there’s a number of people looking to build credit for the first time. We’ll address this segment first. How long does it take to build credit initially is actually a question that is quite easy to address. Most noteworthy, anyone can get a line a credit, but not everyone is responsible enough to maintain it. Above all, being responsible and maintaining your reputation early on is key.
First off, it’s important to start small. Open up just one line of credit to start. Treat that line of credit as cash as opposed to a loan. To clarify, only use your line of credit when you’re sure that you have cash funds allocated to cover it before your scheduled due date. Furthermore, here are the best tips to follow for building your credit from scratch:
How Long Does It Take To Build Credit Best Tips
- Never use more than 30% of your available credit. To clarify, credit use and the type of credit that someone has accounts for nearly 40% of someone’s overall credit score. Always having credit cards at the limit or even worse, over the limit will not help in building credit.
- Avoid interest charges by paying your balance in full before the due date every month. Avoiding interest charges will save money and further build positive standing with credit card companies.
- Pay bills on time. Every time.
- Trust no one. This may seem a bit mean, however, there’s a reason why someone is coming to you for credit as opposed to using their own credit.
- The faster you start the process of building your credit, the better. Ideally, once you start working and bringing in steady income, it’s advised to get at least one credit card. Once that card is received, following the steps outlined above will be essential.
I’m Still Building Credit. What Happens If I’m Not Approved?
So, building credit isn’t always seamless. At times, there are obstacles to overcome. In this case, the best option would be to obtain a secured credit card. To clarify, a secured credit card will have a higher APR. However, the approval rates are over 90%. But, there is one catch. Secured credit card options require a security deposit equal to the amount of the credit line approved for.
For example, a $300 credit line would require a $300 deposit. Yes, it does seem like a big commitment. However, in as little as three months, credit lines can increase without the need for more deposits. Also, by maintaining it for six months to a year, credit companies are known to offer clients regular credit cards. This is simply because credit scores would’ve drastically increased by then with on time and steady payment.
To sum up, following all of the tips above will result in building credit in no time. Hence, opening more opportunities for even more credit.
How Long Does It Take To Build Credit After Negative Marks
First of all, when improving credit, it’s important to have a goal in mind. Also, understanding what one’s current credit situation is, will always be the first step. So, before working to rebuild credit, it’s important to obtain a full credit report and score. Understanding what your score is key.
Lexington Law offer a free credit report, credit score and consultation. Above all, their services are highly recommended…..especially for free! Get your Lexington Law Free Credit Report, Score and Lexington Free Credit Consultation Now! Learn more about Lexington Law with this amazing video included below.
To clarify, a credit score is calculated from the info found in a credit report. Factors influencing your credit score includes payment history, amount of debt, credit history length, amount of new credit, and credit mix.
Most credit scores range from 300 – 850. Generally speaking scores between 700-749 are labeled “Good” credit. Furthermore, scores of 750 and above are labeled “Excellent” credit. Also, scores below 500 are considered bad credit.
For example, here is a run down of how your score is calculated:
- 35 percent is based on payment history. Late/missed payments can affect you for 5-7 years. Foreclosures, Collections and Bankruptcies can last for up to 7 years on your credit report.
- 30 percent is based on credit use.
- 15 percent is based on length of credit history.
- 10 percent is based on types of credit used.
- 10 percent is based on recent searches for credit.
So, With All Of That Said, How Long Does It Take To Build Credit Again
Credit scores play a huge factor in credit recovery. Hence, why it’s key to both know and work on that credit score consistently.
Above all, waiting up to seven years to build credit after late and missed payments, liens, collections and foreclosures does not have to be the case. Here are some best practices that can be used right away to cut that time down fast.
- Stop applying for and opening up new lines of credit. For example, credit use, types of credit and searches for credit make up 50% of credit scores. So, by stopping that funnel, a person is already making progress.
- Consolidate loan searches. Anyone looking for car loans or home loans should do so within a short amount of time (one week) to limits the amount of inquiries/searches of credit
- Increase limits. The idea behind this is to get below that magical number of available 30% of credit used.
- Pay of any small debts that you can afford.
- Correct errors on credit report. Unfortunately, for the average consumer, this is not so easy. Above all, with how long does it take to build credit, this plays a huge role in just how long the process takes. For such an important job we recommend Lexington Law. Lexington Law will review reports and contact companies on a clients behalf to reduce or completely eliminate debt or errors. For a limited time only, they are offering a free credit consultation, free credit score and report. Get your Lexington Law Free Credit Report, Score and Lexington Free Credit Consultation Now! Also, to learn more about Lexington Law, read our latest How To Raise Credit Score by 200 Points Article.
How Long Does It Take To Build Credit Summary
Above all, have a plan and remain confident. It’s easier to ruin credit than to rebuild it again. Hence, the importance of building it and sustaining it. For any advice in relation to credit building and referring, we recommend Lexington Law. Even if it’s just a question, take advantage of the Lexington Law Free Consultation Today!