How Long Does It Take For A Credit Card To Build Your Credit?

Credit Card Phone Woman

Building or rebuilding your credit can seem to take an eternity when you are desperate for a higher score. One of the fastest ways to raise your score is by using credit cards responsibly. However, while it would be nice to watch your score grow in just a few days or weeks, building and rebuilding credit takes time.

First Steps

Your score will not begin going up until you have made all of your payments on time. Since your credit will not start improving until you do this, it is important to get started right away.

Another important first step is lowering your debt level. The amount you owe is second only to on-time payments in determining your score. Paying off as many balances as possible will increase your credit score. If you cannot pay off the full balance, at least pay down the debt.

If you carry little debt and make all of your payments on-time, your score will increase dramatically. After making on-time payments for just a few months, most credit card users will see a significant increase in their scores. Many credit card companies will offer new cardholders an increased credit line after five months of timely payments. For those with more dubious credit, it may take a full year of on-time payments to see improvement. It can also take a year to move from fair to good or from good to excellent credit.

Starting from Scratch

Some people have a low score simply because they have no credit history. These folks could include recent immigrants, young adults and those who have simply avoided credit in the past. Since these consumers have a low score because they have too few accounts, it could be beneficial for them to open new accounts–as long as they manage this new credit responsibly. Making on-time payments on these accounts can help consumers go from no credit to good credit in just a year.

Credit Cards that Improve Credit

Almost any credit card can help you build or rebuild your credit. Many turn to secured credit cards, as it is easier to get approved for these if you have a lower credit score. To open an account, applications will have to provide a refundable security deposit. Creditors will still report payments to all three consumer credit bureaus.

It is important to remember that debit cards, prepaid cards and ATM/check cards are not reported to credit agencies, as they are not considered a line of credit.

Using Credit Cards to Build Credit the Right Way

It bears repeating that credit card payments must be made on time every month, as payment history is the most important consideration when calculating your credit score. While you should strive to pay your balance every month, you will at least want to make the minimum payment–otherwise, it does not count as an on-time payment.

If you worry about remembering your monthly payment, most credit card companies offer email and texts alerts. Most issuers also offer an automatic electronic payment system. Cardholders can set this up to deduct any amount from their bank account each month, so they never have to worry about missing a payment.

If you do not want to opt for automatic deduction, you can also utilize electronic payments. This is a much faster and more reliable payment method than mailing your check.

If you do not want to open a credit card in your own name, see if someone with excellent credit will make you an authorized user on their account. This will help you increase your score.

Finally, many credit card issuers have started to offer free credit tracking benefits, so make sure you take advantage of these. Having free access to your credit score every month means you can watch your credit improve, which is sure to reinforce the positive credit habits you are building. Monitoring your credit score will also help you notice any issues so that you can fix them before they get out of hand. Finally, these services may also offer advice on how you can improve your score.

While credit cards can be problematic when used recklessly, they can help you quickly improve your credit if you use them carefully.

About Lynn Oldshue

Lynn Oldshue has written personal finance stories for for twelve years. She majored in public relations at Mississippi State University.
View all posts by lynn