How Long Does It Take to Build Credit With a Credit Card?

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By Kimberly Offord
eHow Contributing Writer

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Without credit, a consumer has limited resources and opportunities available. Building credit is the concern of many consumers who either have little to no credit or have made bad credit decisions in the past. The key to understanding the first steps in building a healthy credit history is in understanding how the credit process works. Using a credit card can prove either detrimental or advantageous to this process.

Credit Cards

A credit card is a loan to a consumer to purchase goods and services. When using credit cards, a consumer is usually given a spending limit he must stay within. There are also terms that must be followed regarding repayment of the loan. In exchange for offering the service, the credit card company may charge an interest rate or other fees and penalties for the services provided.

Credit Scores

A good credit or FICO score is determined by five key factors: payment history, amount owed, length of credit history, new credit and types of credit. Building good credit is determined by the ability to juggle these five elements. Acquiring debt and making timely payments with creditors such as student loan companies, credit card merchants, utility accounts, lease agreements and car loan and mortgage companies are all steps in building credit.

How Long

The key to building credit with a credit card begins with the timing of the company reporting to the credit bureaus and the consumer maintaining consistent behavior. The longer the consumer pays the agreed amount and pays it on time, the more favorable having the credit card becomes. In most instances, it takes at the least 3 months to see the least impact of a credit card on a credit history. However, consistent payments over 6 months to a year will help build credit even better. Every situation is different and unique.

Limitations

One single credit card will not build credit alone. Building credit involves a good mix of credit history. In addition, it is essential to understand that though a bill may be paid on time, if it is consistently at or over the credit limit, this can impact credit in a negative way. Having multiple credits card can have the same devastating effect.

Strategies

Acquire cards specifically for building credit. Credit cards that have lower limits or deposits required are used for such purposes. While they are limited in their uses, they still serve the purposes of reporting positive information to credit files. By charging only what is affordable and keeping the balance of the card at either zero or under half the limit, you can build credit with credit cards. Maintain the card in good standing for at least 6 months before checking its effect on your credit history.