How long does it take to establish your credit score?

If you’ve never applied for or had a credit card, loan, or overdraft account, you might not have a credit score. And to qualify for financial products with the most favourable terms, you need to have a good credit score.

So, how long does it take to establish your credit score? Establishing a credit score in the UK takes at least a few months. However, the exact time frame depends on various factors like your own financial behaviour, how frequently you use credit, and the specific credit reference agency (CRA) you check.

Credit scores are essential for securing loans, mortgages, and even some utility contracts. However, many people are unsure how long it actually takes to build one from scratch. Here, we’ll break down the credit scoring system in the UK and provide some clarity to how long you can expect it to take to build your score from scratch.

How Does the Credit Scoring System Work in the UK?

Let’s start by explaining how credit scoring actually works in the UK. The UK relies on three main credit reference agencies: Experian, Equifax, and TransUnion. While each CRA uses slightly different scoring systems, they all rely on similar financial data to assess your creditworthiness.

We do have a deep dive you can read on the main factors influencing your credit score, but the main points you should know about establishing a credit score are:

You can’t have a credit score without a credit history. You need to actively use credit products like credit cards, loans, or mobile phone contracts to begin building a credit history.
A credit score is fundamentally a measure of how reliably you make repayments. So, it takes at least a few months before a given CRA will generate a score for you, as lenders need time to report your payment activity.
Lenders ultimately use the information in your credit report and your credit score to assess whether they should give you a loan, a credit card, and so on. A good credit score increases your chances of being approved for credit products like these, while a poorer score can lead to you being rejected. In reality though, things aren’t so black and white, but that doesn’t mean you can disregard your credit score, as it will at a minimum influence things like your interest rate and how much you’ll pay in the long-run.

When Does Your Credit Score Start to Appear?

As we just mentioned, 3-6 months of regular credit activity should be enough to establish a credit score. Here’s a quick breakdown of the process:

Opening an account: The process of getting a credit score begins when you open a credit account for the first time. This could be a credit card, a personal loan, or even some mobile phone contracts.
Using credit: Using your credit will generate information for the rating agencies. The most important data will centre around how responsible you are with the credit and whether you make repayments on time. Indeed, your payment history—lenders reporting whether you make payments on time and in full— is the single-most important factor influencing your credit score. Conversely, late or missed payments will harm your credit score.
Scores are generated: Based on the data they receive, CRAs will calculate your credit score. An important point to note is that each credit reference agency uses their own credit-scoring algorithm, which means that your score may vary based on which credit agency you check. Typically, these variations are due to how and when lenders report your activities. While these scores may vary, your credit rating will typically remain steady across Experian, Equifax, and TransUnion.

Key Factors That Influence the Speed of Building a Credit Score

There are various factors that affect how quickly you can build up a credit score. Some of the most common include:

Credit Activity: You can't build a credit score without using credit regularly. Lenders need to see how you handle borrowed money to predict your future behaviours. So, if you don’t use credit regularly enough, it may take CRAs longer to generate a credit score.

Payment History: Your payment history is the most important factor that credit agencies take into account. If you make payments on time, you’ll demonstrate reliability and help build trustworthiness. This will elevate your credit score faster.

Credit Utilisation: Using a high percentage of your available credit can suggest financial distress. Using a small percentage of available credit, ideally below 30%, can positively influence your score.

Address Stability: Registering on the electoral roll helps confirm an individual’s identity and can speed up the overall process.

Can You Speed Up the Process?

There aren’t any shortcuts to building a good credit score, but there are some strategies that can work in your favour and help you accelerate the process.

Get on the Electoral Roll: As mentioned above, register to vote as soon as you are eligible. This approach is a simple but effective way to verify your identity.
Consider a credit builder card: If you're new to credit, a credit builder card can be a good option. These cards are designed to help people limited or no credit history build their score by establishing a strong payment history.
Use credit responsibly: Use your credit card regularly but responsibly, and always pay your bills on time. This process generates data for the CRAs to assess.

Related read: How to Use a Credit Card Wisely
Avoid multiple applications: Believe it or not, applying for credit actually hurts your credit score because a hard credit search is performed. However, this impact will typically disappear within a year if you manage your new credit wisely. However, with that impact in mind, you should avoid applying for multiple credit cards or loans in a short period. Doing so not only hurts your score, but can signal to lenders that you’re desperate, which will lead to your applications being rejected.

Three Common Misconceptions About Building a Credit Score

There are a lot of common misconceptions about building a credit score that you should be aware of. So, let’s set the record straight on some of these myths.

Myth #1: Not using credit is good

Some people believe that not using credit is good for their credit score. This belief comes from a prudent place, but it isn’t accurate. While using too much of your available credit can signal distress and hurt your credit score, using credit responsibly will build your score.

Myth #2: A good income will boost your credit score

This belief may make sense on the surface, but it’s not a factor that influences your credit score. Here’s where the confusion stems from: Lenders will consider your income when you apply for credit (like a credit card or loan), and they might accept or deny your loan based on your income. However, your credit score is influenced by how you use your money.

Myth #3: Credit scores are identical across all credit agencies

Each credit rating agency uses its own scoring model. As such, there may be slightly different information from agency to agency. We’ve got a full article about why this is and how you can get the most accurate score. Check it out!

The Bottom Line

If you want to establish a credit score in the UK, you’ll need at least a few months of constant credit use. While you can’t affect the process overnight, there are several proactive steps you can take to move things along. Joining the electoral roll, making timely payments, and using your credit responsibility will help move things along.

If you’re new to building credit and you want to take control of the situation, sign up for a Credit Builder Account with Pave Plus. Pave’s Credit Builder Accounts help you establish a strong payment history—the foundation of a good credit score—by reporting your timely payments to Equifax and TransUnion. Plus, Pave is the only app that provides real-time access to both your Equifax and TransUnion credit scores in a single place, giving you maximum insight into your credit-building journey.

Ready to get started? Download Pave today!

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