When you have no credit, working your way up to good credit scores can make you feel like an impatient child on a long road trip, asking, “Are we there yet?”
When you get your first credit line — maybe a student loan or authorized user status on a parent’s credit card — you’ll start building a credit history but won’t instantly have a score. This can make it tough to qualify for good-credit credit cards. If you’re having trouble qualifying for a loan or credit card, a credit-builder loan or secured credit card might help you get a foot in the credit door.
There are two main credit scoring systems, FICO and its newer competitor, VantageScore. VantageScore can produce a score within a month or two, while FICO takes up to six months.
Once you’ve built up six months of on-time payments and your creditors have reported them to the credit bureaus, you should have decent credit scores — though they won’t be perfect.
What can I do to help my score right now?
Here are some ways you can give a limited credit history a boost:
Inherit your parents’ good credit. If your parents have good credit, ask if they’ll add you as an authorized user. (They should call the issuer to make sure it reports authorized user activity to the credit bureaus.) Being an authorized user lets you benefit from the length of their credit history and may diversify the types of credit on your report; both things can build your credit.
Keep up the good work. Unlike missteps like late payments, a good credit history stays on your credit report forever, as long as the accounts stay open. Make sure you’re putting your best foot forward, even when no one’s pulling your scores.
Age matters for credit scores
There’s one thing that borrowers with great credit scores tend to have in common and younger borrowers lack: longevity. A recent report from credit bureau Experian notes that the oldest borrowers tend to have the best scores, thanks to long credit histories, lower utilization rates and fewer delinquent accounts.
If you just got your first credit card, you’re not going to have a score over 800, no matter how hard you try. Instead of getting frustrated, make building your credit a long-term goal.
Keep accounts open — even ones you don’t use very often — so lenders can see your good borrowing behavior over time. Pay your bills punctually, and use less than 30% of your credit limit. Get started on these good credit habits and you’ll be on your way to building your credit.
This article updated Jan. 6, 2017.