Building an asset from scratch requires credit activity, such as opening and using a credit card or paying off a loan. It takes about six months of credit activity to establish a sufficient history to obtain a FICO credit score, which is used in 90% of credit decisions. FICO credit scores range from 300 to 850, and a score above 700 is considered a good credit score. Scores above 800 are considered excellent.
Depending on your credit history, it's quite possible that you can improve your credit score by 100 to 150 points in 90 days. If you just came out of bankruptcy and your score is 450, it will take much longer. The time it takes to get your credit score depends on the factors that caused you to have a lower credit score. If you're just creating credit from scratch and paying your bills on time, it will usually only take a few months to see your score start to rise. If you're trying to recover your credit after negative elements have affected your credit report, it may take longer. When you get a loan to build credit, the lender will deposit the amount approved for you into a savings account.
Your average credit history is based on the length of time you've had any loan or credit card. True credit rating growth is due to the creation of your own credit history, not someone else's.It usually takes about three months to recover after a credit card has been used up to the maximum or after you close an unused credit card account. To keep your credit rising once you start, make sure you pay your bills on time and don't have high credit card balances. You can also become an authorized user on someone else's card and use their limit. Doing too many thorough inquiries on your credit report can be a sign that you're desperately looking for credit and pose a risk to lenders.
Demonstrating that you make your payments on time and that you don't have high credit card balances makes you a less risky and more reliable credit user in the eyes of lenders. However, it may not have enough of an impact to change your credit rating; the size of the impact depends on your current credit history. I recommend that you don't apply for premium or mid-range cards until your credit score is at least 700. When filing for bankruptcy or repairing your credit, call Ascent Law LLC for a free consultation (80 676-5506). When you finally get a good score and unsecured cards are approved, you can get rid of your secured card and the bank will return your money.
Keep in mind that just because you're building credit doesn't necessarily mean you're building up good credit.