It can take as little as one month to build a credit score from scratch, once you get your first credit card or loan. And your first credit score could be anywhere from bad to excellent, depending on whether you pay your bills on time and borrow responsibly. The exact timeframe, however, depends on the company calculating your score and the scoring model they’re using. For example, VantageScore 3.0 is capable of generating a score with just one month of credit history. But it can take three to six months to get a score from other models, including FICO’s.
A relatively new credit score based on limited credit-report information also has the potential to be quite volatile, fluctuating as fresh data is taken into account. For example, if you manage to reach good credit fairly soon after establishing credit then miss a couple of monthly minimum payments, your credit standing will likely take a dive. That is why building a truly good credit score – based on a solid track record of financial responsibility – usually takes about three years. And building a consistently excellent score typically takes around five.
But that does not mean you should just wait around for good credit to come to you. There are indeed steps that you can take to speed up the clock. And the first is to see where you’re starting from. So check your latest credit score and report for free on WalletHub. We’ll give you personalized advice for how to build credit, plus daily updates so you can track your performance.
Below, you can learn a bit more about the contributions of time, age and experience to your credit score.
Is Aging the Key to Building Credit?
The length of your credit history plays an important role in credit scoring, accounting for about 15% of your overall rating. But it’s possible to build credit fairly quickly if you ace most of the other categories, especially payment history, that make up a credit score.
So how important is the simple passage of time to credit building?
Well, people with good or excellent credit tend to be older and more affluent, as you can see in the table below. For example, the average person with excellent credit is 11 years older than the average person with bad credit and makes over $18,000 more per year. The table also shows how people in each credit-score tier compare to one another in terms of average age, income and length of credit history.
Older & Wiser Usually Means Better Credit
| Credit Score Tier | Average Age | Average Income | Share of All Borrowers |
|---|---|---|---|
| Excellent | 52 | $64,268 | 38% |
| Good | 47 | $58,740 | 17% |
| Fair / Limited | 45 | $53,946 | 14% |
| Bad | 41 | $45,797 | 31% |
Source: TrasUnion, October 2016
Take those figures with a grain of salt, however. Everyone is eligible to open a credit card at 18 or become an authorized user on a parent’s account before that. And it certainly doesn’t take decades to build a good, or even excellent, credit score.
Great Credit Isn’t Just for Grandparents
If a borrower’s age and experience directly influenced his or her credit score, you’d assume the states with the oldest people would have the highest credit scores. But that’s not the case, as you can see from the table below. In fact, the state with the highest average credit score – Minnesota, at 707 – ranks right in the middle of the pack (24th) in terms of median age.
| State | Average Credit Score | Median Age |
|---|---|---|
| OLDEST STATES: 682 Avg. Score | ||
| Maine | 688 | 44.1 |
| Vermont | 700 | 42.8 |
| New Hampshire | 699 | 42.5 |
| West Virginia | 658 | 41.9 |
| Florida | 666 | 41.6 |
| YOUNGEST STATES: 676 Avg. Score | ||
| Utah | 679 | 30.5 |
| Alaska | 668 | 33.3 |
| Texas | 655 | 34.3 |
| North Dakota | 698 | 35.1 |
| Idaho | 678 | 35.9 |
Sources: U.S. Census Bureau’s American Community Survey (2014) & Experian State of Credit (2016)
At the end of the day, our credit scores are bound to grow at different rates because our financial circumstances and experiences vary. After all, your credit score is basically the sum of the financial decisions that you make every day. Every right move brings you one step closer to good credit. And every misstep moves the goalpost back just a bit.
If you need to brush up on the fundamentals of the process, you can check out our guide to building credit. You can also sign up for a free WalletHub account for some real-time feedback on your progress. WalletHub is the first website to offer free credit scores and full credit reports that are updated on a daily basis.
