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How Long Does It Take to Build Your Credit History?

Learn About Credit HistoryWell, it takes years to build a credit history, but it only takes a few weeks and months to destroy it. It's very much like a reputation. It can take a very long time to build a good one that builds respect and creates opportunities for you. However, once your reputation has been sullied, it can take a very long time to rebuild it and get people to trust you again.

Unlike other things, there are no shortcuts or quick fixes to building your credit history. You may have read that lenders are very conservative by necessity. They prefer that potential borrowers have a long and verifiable credit history so they can weigh the risks of lending to them. But everybody has to begin building credit history somewhere, and the best way to begin building a credit history is by paying your bills on time, every time.

Whether it's a utility bill, credit card statement, car payment, or rent, paying your bills on time is the very best way to build an excellent credit history. Your payment history alone accounts for 35 percent of your credit history, so you can see the importance of paying all your bills on time. Nevertheless, since you know that it takes years to build your credit history, it's helpful to know how long things that hurt your credit history can stay on your report and continue to damage your credit ratings.

To help you understand how long it takes to build your credit history, here are some things that can hurt your credit history and how long they remain on your credit report (which is a summary of your credit history):

  • Missed payments stay on your credit report for seven years.

  • Bankruptcies stay on your credit report for ten years.

  • Information about litigation or judgments against you can remain on your credit report for seven years.

  • Tax liens on any property you own stay on your credit report for seven years from the time they're paid.

Again, it takes years to build your credit history. Lenders want to see how you manage your credit over a long period. However, if you don't have a lengthy credit history, don't despair. Everybody has to start somewhere. You'll still have options to get credit, but you may have to deal with lower credit limits and higher interest rates to get it. Just make sure that you make your payments on time, and you'll develop an excellent credit history that you — and potential lenders — will come to trust.

 

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