How long does it take to build credit?

It will take a minimum of 30 days to build credit. Or at least have some credit reporting on your credit report. But you may already have credit and you don’t even know it.

When ever you are approved for a credit card, car loan, personal loan etc. the credit bureaus are not going to report it for at least 30 days. In some cases it could take longer. The reason for this is that they are waiting on the lender to submit this information to them.

Even after the information about your loan has been submitted it may not show up for that 30 day period as the credit bureaus only update their database at the beginning of the month.

If you are trying to build credit it is important to know whether or not the creditor will be reporting to the credit bureaus. In fact it would be a good idea to find out which credit bureaus they are reporting to. It would be preferable that they are reporting to all three bureaus.

If they are not reporting to the bureaus you are only building what I call phantom credit. You have credit but it is not reflecting on your credit report. This can still be useful when applying for other credit because you can get a payment history for this credit and show it to a new lender.

The fact of the matter is that if you have the electricity, phone, cell phone, water, trash, cable, etc. in your name you have already established credit. If you want to buy a home you can do so with out even having a credit score. You only need to show a 1 year history of paying at least three sources on time. It is preferable if you have more.

The utilities that are in your name are another phantom credit builder. They can be used to get other forms of credit. All you need to do is call the utility provider and ask for you pay history. They get this request all the time and it will be no problem getting it.

As far as how long does it take to build good credit that is another matter. The truth of the matter is that it takes time. Not only does it take time but you need a good mix of credit as well. The longer you have had credit, the more diverse the credit sources, and your pay history are what really builds your credit.

There are some short cuts to reduce how long it takes to build credit. The quickest one is to be added to someone else’s account as a joint owner. This could be car loans. Credit cards etc. Be very careful with this method. I have outlined these strategies in other articles on this site.