How to Build Credit History

Do you want to increase your credit score by 200 points in only 12 months? The first step is to ignore any company or individual who guarantees that they can help you do this or any similar claim. Once you start to understand how to impact credit and build credit history, you also begin to see that credit scores are too dynamic and complex to say that you can go from X to Y in 12 months.

How long does it take to build credit history? We would love to give you a firm timeline, but there are simply too many variables.

Building credit history depends on several factors, such as:

  • How many credit cards you have and their balances
  • Your payment history
  • Your spending behavior
  • Many, many other things

Your credit score is an important number, as it can be a big determinant in your ability to qualify for personal loans. If you’re facing an emergency expense without the savings to deal with it, you wouldn’t want your application for an emergency loan to get rejected, right? To avoid this, you’ll want to make sure you implement financial habits that may have an impact on your credit history.

Want to learn more about emergency loans and when you might consider applying for one? Click here!

Today we’ll help you to understand the scope of the work that may help you build credit history. How much time any of these things take to have any impact on your credit score will depend on many things, including where you’re starting from, where you’re looking to go, and how diligent you are along the way.

Step 1: Find and Dispute Any Errors on Your Credit Report

Man looking at a screen displaying his credit report

The first step is to make sure your credit score or history is not being impacted by something unfairly. Too many people just assume their credit report is accurate. This means that their score may have been inaccurately lower than it should have been.

Here is a suggested process for reporting an error:

1. Get Your Credit Reports

You will need credit reports from the three major agencies: Equifax, Experian, and TransUnion. The good news is you’re entitled to one free credit report every 12 months, and there is no need to contact all three agencies individually.

You will need to verify your identity by providing your name, address, Social Security number, and date of birth. You may also have to provide other information such as your previous address if you have moved in the last two years.

2. Review Your Reports for Errors

Now, you will want to take a deep and thorough dive into your credit reports. There are a number of errors that may show up, but generally speaking, be on the lookout for:

  • Incorrect personal information, such as your name, address, or employment information.
  • Incorrect public records about lawsuits you have/have not been involved in. There may also be incorrect information about a bankruptcy that you may have filed.
  • Incorrect accounts listed in your name that have wrong or outdated information or balances. You will also want to keep an eye out for fraudulent accounts set up under your name.

Be as thorough as possible when reviewing your credit reports for accuracy, because these details are important parts of your credit score.

3. Prepare Dispute Letter(s) and Supporting Documentation

If you do find any errors, you may want to start the process of formally filing a dispute to have them resolved.

Begin by gathering any supporting documents, which may include invoices or bank statements.

Once you have gathered them, the Federal Trade Commission has provided helpful dispute letter templates that you could use to communicate with the credit reporting agency and the information provider (the person, company, or organization that provided the information to the credit bureau)[1].

Make sure you provide copies of the relevant supporting documents and never send the originals. You may want to consider sending your letters by certified mail, with “return receipt requested,” so you can track everything and confirm when each respective party has received your letter.


If a credit bureau removes any errors from your report, it may impact your score. Whether your credit score changes or not, it depends on the nature of your dispute.

The entire process may take a few months, depending on the length of your report and the number of disputes you have. But the time and effort are worth it if you’re able to remove inaccuracies and impact your score.

Step 2: Look at Your Spending and Create a Budget

Cellphone and a pen on a paper with pie chart budget

Now, it’s time to sit down and take a frank look at your financial habits. Learning how to build up credit history also means learning how to build good spending habits. Begin by taking a close look at your bank statements from the last few months to see exactly how you’re spending your money.

You may notice that you’re buying your lunch at work twice a week. This may not seem terribly wasteful when you’re hungry. However, now you can see that this is costing you $15 a meal, which is $30 a week, and $120 per month. You can now see that this $120 a month could be better spent paying down your debt or on your bills.

Add up ALL of Your Monthly Charges

How much money do you think you’re spending every month on entertainment subscription services? It may be more than you think. This is why you need to go over your bank and credit card statements to see exactly where your money is currently going. It’s easy to overlook how much you spend if you only work with guestimates. Tracking your spending carefully will help show a more accurate picture of your finances.

Create a Realistic Budget

Now, you need to create a budget that you can live with. This means you need to set realistic goals when creating a budget, or you’ll have a hard time keeping up with it when you put it into practice.

If you need help figuring out how you should be allocating your money, you can take a look at these guides to help you get started:

Timeline: This is highly variable and will depend on a number of factors. Creating a budget may only take a few hours, but integrating it into your day-to-day life could represent a major adjustment that takes you weeks to get used to. However, the more realistic you are with your financial goals, the easier the new budget will be to follow.

Step 3: Commit to Paying Your Bills on Time

This step goes hand-in-hand with setting your monthly budget. If you’ve created a sustainable and achievable budget, you should have accounted for all your monthly bills and you should be able to comfortably afford them.

The act of paying your bills on time may not significantly impact your credit score, as some of the companies you’re making payments to may not report your payments to credit agencies.

However, there are some strategies that may help you impact your credit history by paying your bills.

Rent Reporting Services

While rent payments are usually reported to a credit bureau, you can pay a service to report your rent payments which may help you build your credit report.

Most of these services may charge you some sort of sign-up fee, and then a monthly charge to report your rent payments. However, if you’re looking to build your credit history, this may be an option you may want to explore. Just remember to do thorough research on any rent reporting services you might be considering working with before you follow through. Why? Well, whenever you work with a financial institution of any sort, it’s important to put in the time to make sure they go about their business responsibly. For example, if you’re looking for an online loan, you’ll want to make sure they prioritize the safety of your personal information.

Wondering what else to look for when it comes to finding a responsible lending company? Click here!

Can I Hire a Company to Show Me How to Build Credit History? Can They Speed Things Up?

When you first start to ask, “How long does it take to build credit?” you might start to wonder how you can speed up this process. Maybe you’ve seen credit repair companies that promise they can help you build your credit score by X points in 12 months. They may offer you services that may help you rebuild your credit.

However, there is no way to pay a company to fast-track building your credit history.  Don’t be fooled by marketing that sounds too good to be true, because it more than likely is.

It’s very important to know that any time you learn how to build credit history, you are the one doing most of the work. You’re the one carrying out good habits, sticking to a budget, and making your payments on time.

As you can see, there is no simple answer to, “How long does it take to build my credit history?” However, after reading this, we hope you have a better idea of what you need to do to get there.

Disclaimer: This article provides general information only and does not constitute financial, legal or other professional advice. For full details, see CreditFresh’s Terms of Use.


Posted in: Credit Score