Positive changes in credit scores can happen within six months

3 Rules of Credit Building



Pay down installment loans monthly. Use and pay revolving accounts at least once every 6 months, but monthly is best.



Keep debt amounts as low as possible. Use less than 30% of total credit limit (example: only $300 out of $1000 limit).



Pay at least the minimum amount required, on time before the due date. Start paying on accounts past due.

When a person follows these rules, they can build credit even with one installment account or one revolving account, as long as it is reported to the credit bureaus. For example, using a credit card once a month to buy groceries and paying at least the minimum required before the due date - just doing this can build good credit! 

A thick file of good credit history can help get the best terms and rates from businesses, and looking at factors like new credit and credit mix can help scores. But first make sure that the steps taken to get there - like applying for new products and services - fit needs and goals. And then everyone can reap the rewards!

*You might be facing heavier credit issues such as large student loans or credit card debt, foreclosure or bankruptcy, identity theft, and more. These cases might require other actions to address these problems before or as a part of credit building. Our partner organizations have experience in coaching people through these challenges, and providing reliable resources for them. In addition, American Consumer Credit Counseling also offers great services in debt management.

Other credit building tips:

Length of Credit History

Try not to close old revolving accounts in good standing. They show longer history, and can be used to build good credit.

New Credit

New credit can lower scores, but can add an accounts credit building or increase credit limits. New credit should fit financial needs and goals.

Credit Mix

Having credit mix shows history with different types of credit and can help scores. Don't get credit just to have a mix - it should fit needs and goals.

Collections & Public Records

Track and pay bills and debts that only show up in the report when in collections/public records. Once there, they can lower a score by 100+ points.

Test Your Knowledge - Myth or Fact?


Leaving a balance on a credit card, past the payment due date, helps build credit and improve scores. 



Leaving a balance past the due date (as long as the minimum amount is paid) does not help or hurt a credit score. But it does mean you'll end up paying interest charges on that balance. 

Test Your Knowledge - Myth or Fact?


Closing an account, like an old and unused credit card account, helps build credit and improve scores.



Closing accounts does not help build credit. Closing out a loan because you paid it off is a good thing, but closing accounts like unused credit cards can actually lower a credit score.