If you want to build credit from nothing (or rebuild credit), you'll need a lot of patience and better financial habits. It'll also probably take a little longer than you'd expect.

John Milton once said, and I paraphrase, that it’s a long, hard road out of hell. If I didn’t know any better, I’d say he was talking about the road to good credit, which may be just as long and complicated. Building credit takes patience, dedication, and discipline.

Whether you’re fresh to the credit world and building up from scratch or re-entering after bankruptcy, building your credit score from the bottom takes time. The good news is that there are things you can do to expedite the process, and steps you can take to avoid common pitfalls that might set back your progress by additional years.

Check out MU30 founder David Weliver’s tips on how to build credit from scratch

You should know where your credit score is at right now

Despite what people say on TV and in the media, your credit score isn’t zero right now, no matter how bad things have been. In fact, unless you have no credit history at all, then your score is probably sitting somewhere around 300.

Credit is scored on a range that’s between 300 and 850, so it isn’t possible to have a score of zero. If you’re new to the credit world and don’t have enough history in your report, you just won’t have a score at all.

Why does this matter? Well, it might bolster morale to know that you’re not working from nothing. Besides, 300 sounds better than zero. However, that doesn’t mean you don’t have a lot of work ahead. Here’s a breakdown of the different credit score ranges and what they mean:

  • 300 to 599 is considered poor credit, and you may have trouble getting a loan, and if you do manage to secure a loan, the interest rate will be higher
  • 600 to 699 is considered fair credit score, which is where the national average falls
  • 700 to 749 is considered good credit, and you won’t have trouble getting a loan, but you may not be eligible for the best rates
  • Anything above 750 is considered excellent credit, and at this point, you’re eligible for the best rates on all types of loans

How long will building my credit take?

I’m not going to mince words: building credit is a long process. It takes time and dedication—years, even—to build good or excellent credit. It won’t happen overnight, but it will happen. As long as you cultivate and stick to the right habits, you’ll be able to pull up your score.

But one of the major factors that influence a good credit score is an extended borrowing history. That means no matter how hard you try if you’re just starting out or just starting to rebuild, it could take at least seven years before you start seeing the real results you’re looking for.

Credit histories have long memories, and things like missed payments will stay on your record for seven years, while bankruptcies will be on there for up to 10. If you’re looking for full credit recovery, you’re looking at a much lengthier process.

Now that doesn’t mean that you can’t improve your credit in the short-term, because you can. Even if you’re starting from scratch to build a credit history for the first time, within two to six months, you’ll have a history long enough to be scored.

These are the habits that will help build your credit

There are five main factors that are taken into consideration when your credit is scored, and they’re all weighted differently during the calculation. Two of the most important factors are payment history and credit utilization, because together they account for 70% of your score.

Payment history is basically a rundown of how good you’ve been at paying your bills on time. People tend to develop habits in this regard, so if you’ve typically been late paying your bills, creditors will assume you’ll continue to do so in the future

Credit utilization is an assessment of how much of your available credit you’re using. If you only have $5,000 in credit and are using $4,000 of it, this is very high. You want to keep your credit utilization below 30%, which would be $1,500 of the $5,000 available.

The three remaining factors (all worth 10% of your score) that help to determine your credit score are the length of your credit history, the amount of debt you have, and applications for new credit. Each time you apply for credit, it prompts a hard inquiry that impacts your score.

And here are the habits to avoid when you’re trying to build your credit

Just as there are practices to build good credit, there are bad habits you can adopt that will result in a drop in your credit score. These are basically the opposite of the good habits, and they include:

  • Missing payments and delinquencies
  • Making late payments
  • Applying for new credit frequently
  • Using too much of your available credit
  • Having too much debt (a high debt-to-income ratio)

What can I start doing right now to see improvements in my score?

The number one thing you can do immediately is start paying your bills on time, every time. No excuses. Payment history is 35% of your credit score. All that credit bureaus ask is that you make your payments by the date on the bill.

Number two: Reduce the amount of credit you’re using to free up more of your available balance. You can do this in a few ways, including paying off lump sums, keeping old accounts open, saying yes to credit increases, and considering a personal loan to help pay down some debt.

Once you get those balances down, make every effort to keep them below the 30% credit utilization threshold. If you’re really aiming for great credit, keep that number below 7%, according to credit expert John Ulzheimer of Credit Sesame.

Other things you can do include: Don’t apply for any new credit, don’t spend beyond your means to ensure you’re always able to pay your bills, and overall, be patient and let your credit history speak for itself.

But how do I really start building credit from the ground up?

In a sad twist of fate, sometimes the biggest obstacle you’ll face to building your credit history is actually getting credit. It’s an unfortunate but common dilemma: How do you get your first credit card when lenders want to see your credit history before approving you? (More on that in a minute).

But before you start worrying about that, sit down with your finances and make sure you’re ready for the commitment. Make a budget that includes your expenses, debts, savings requirements, and income.

When you’ve decided that you’re ready for credit, contact Experian, Equifax, and TransUnion to request free copies of your credit report (if you’ve already spent at least a few months building your credit history).

Look them over carefully, so you know what you’re dealing with and where you’re starting from. The lower your score, the more work you have to do. However, to approach it from a more positive place, the lower your score, the more opportunities you have for improvement.

It’s possible to build a credit history when you’re not even eligible for credit

Finally, when it comes time to apply for credit (if you don’t already have any), there are some totally legit, but non-traditional avenues you can try, especially if you weren’t able to get approved for a credit card.

To start building your credit score, here are a few options to consider:

How Long Does It Take To Build Credit From Nothing? - Self

Self offers a credit builder loan that allows you to build your credit score without the possibility of sinking into debt.  The process to open an account is simple.  First, you select a loan amount and payment terms.  Then, each month you begin to pay on the loan and after you’ve completed the process, Self will send you a check for the sum of your principal payments.

There are four loan amounts offered ($525, $545, $1,000, $1,700) and either 12-month or 24 month payment terms (24 months only available on the $525 loan).   Interest rates are fixed between 12% and 16% and there is a one time application fee of either $9 or $15.  Each month you make a payment toward your loan, Self will report the action to all three credit bureaus.

After you’ve completed your loan, you should only have lost a small amount in interest and fees, while having improved your credit score and profile.  The most expensive loan is the $1,700 loan and the total paid back would be $1,812 (so a total out of pocket fee of $112).


Building some credit can be done in a matter of months. Building good credit, however, is a process that takes years. The trick is to avoid getting discouraged. Cultivate and stick to your good spending and payment habits, and to avoid the actions that will leave black marks all over your credit history.

Working toward an excellent credit score is at least a decade-long endeavor, but it’s definitely worth the dedication. Having excellent credit will mean you’re eligible for any loan you want, the best rates, and the best terms possible. Even if it takes years of effort and commitment, don’t you think that’s worth it in the end?

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About the author

Chris Muller picture
Total Articles: 203
Chris has an MBA with a focus in advanced investments and has been writing about all things personal finance since 2015. He’s also built and run a digital marketing agency, focusing on content marketing, copywriting, and SEO, since 2016. You can connect with Chris on Twitter.