Your credit score is arguably the most important number in your financial life. However, if you have bad credit, it can feel like all your financial doors are closed. Whether you missed your mortgage payments or filed for bankruptcy due to circumstances beyond your control, such things can take a major hit on your credit score.
So, how long does it take to fix your credit score? Unfortunately, there’s no one-size-fits-all answer to this question. The time it takes varies depending on your financial situation. For example, if you missed several payments within the past two years, it might take longer to rebuild your credit.
While there’s no definitive answer, keep reading to learn approximately how long it takes to fix your credit score, the factors that cause bad credit, and the fastest way to improve it.
What Factors Cause Bad Credit?
Your credit score reflects your credit history, and poor financial decisions can lower your score. Here are some of the factors that contribute to poor credit scores:
Late Payment of Bills
Payment history is the most crucial aspect of credit scoring, and one late payment may negatively impact your score. In fact, payment history accounts for roughly 35% of your credit score. Lenders will always want to confirm your ability to repay a loan on time when evaluating your eligibility for new credit.
If you have missed payments for more than a month, creditors will probably report your information to the major credit bureaus, which is then recorded in your credit report.
Bankruptcy Filing
People file for bankruptcy for various reasons. For example, if you’re unable to repay your debts, filing a bankruptcy may be your last resort to obtain legal protection. It may seem like a good option, but it may significantly damage your FICO score.
Depending on the type of bankruptcy you file, the information will be recorded in your credit report and remain for seven to 10 years. Lenders are more reluctant to loan to borrowers with histories of bankruptcies due to the nature of their complexity.
Collection Accounts
When lenders cannot secure payments from a borrower, they use third parties, typically debt collection agencies, to collect the unpaid amounts. Creditors hire or sell the delinquent debt to these companies before or after charging off a borrower’s account.
This information is often recorded in the credit report. And if a history of poor collections isn’t repaid, it might pose more challenges when trying to secure a loan in the future.
Charge-offs
If a borrower’s account remains delinquent for an extended period of time, chances are a creditor will charge off the account. A charge-off is a declaration that the creditor has given up pursuing debt after the borrower missed payments for several months. Just because your account has been charged off doesn’t mean you’re off the hook. You’re still responsible for paying back the outstanding debts.
When an account is charged off, the information is sent to credit bureaus, which remains in the report for seven years. With this, your credit score will take a major hit.
Defaulting on Loans
Defaulting on loan payments is treated like a charge-off. Creditors will mark your account as “default” if you miss one or more payments. The information is also submitted to credit bureaus, eventually hurting your credit score. With this information, potential lenders will view you as a high-risk borrower and may not loan you.
How Long It Usually Takes to Fix Your Credit Score
The length of time it takes to recover your credit score after negative items appear on your credit report depends on your unique situation and other factors, including:
- The number of negative marks on your credit report
- The type of negative information recorded
- The age of the information
- Where your credit score was before it dropped
If you lately damaged your credit, the time it takes to fix it depends on where the impairment has occurred. Here are common negative marks on credit scores and how long it takes to fix them.
Errors and High Credit Utilization: 1 to 3 Months
Humans aren’t exempt from error. Mistakes happen, and your credit report is not an exception. In addition, creditors can report wrong information unknowingly, which can hurt your scores. Therefore, it’s prudent to regularly review your credit report for mistakes from the three major credit bureaus.
If you notice an error in your report, file a dispute. The bureau will remove the mistake if they find that the information was erroneously included. Disputing such errors and corrections made typically takes one to three months.
Hard Inquiries: 12 to 24 Months
Every time you apply for a loan or a new credit card, creditors will request to check your credit report so they can know your level of risk as a borrower. The request made is called a hard inquiry. Sad to say, hard inquiries can cause your score to drop slightly.
There’s no fast way to deal with hard inquiries; fixing them may take 12 to 24 months. But you can lower the negative impact by getting pre-approved 一 this is a soft credit check, and it won’t affect your score.
Late Payments: 18 to 24 Months
As mentioned earlier, payment history contributes up to 35% of your credit score. Therefore, lenders always look at your scores to ascertain your creditworthiness and ability to repay bills on time.
Late payments stay on your credit report for as long as seven years, and the impact reduces over time if you work on improving it. It could take 24 months to see your credit score rebound after a history of late payments.
Foreclosures and Bankruptcy: 7 to 10 years
A foreclosure remains on your credit report for as long as seven years, after which credit bureaus will remove it. On the other hand, bankruptcies can stay for seven to 10 years on your report, depending on whether you file for Chapter 7 or Chapter 13 bankruptcy.
Fastest Ways to Help You Fix Your Credit Score
Fixing your credit score after the damage often takes time. However, there are proven ways that can help quicken the process.
Resolve Errors
Always review your credit reports for errors. You can get your free credit report from the major credit bureaus for free at AnnualCreditReport.com. If you find any mistakes, dispute them. Once the credit report errors have been removed, you’ll start seeing your scores improve.
Here’s how to file disputes with the major credit bureaus:
| Credit Bureau | By Mail | By Phone | Online |
| Experian | ExperianP.O. Box 9701Allen, TX 75013 | 866-200-6020 | www.experian.com/dispute |
| TransUnion | TransUnion Consumer SolutionsP.O. Box 2000Chester, PA 19016 | 800-916-8800 | https://www.transunion.com/credit-disputes/dispute-your-credit |
| Equifax | Equifax Information Services LLCP.O. Box 740256Atlanta, GA 30374-0256 | 1-888-378-4329 | https://www.equifax.com/personal/credit-report-services/credit-dispute/ |
You can also hire a company to do the work for you. As one of the U.S.’s leading technology-enabled credit-related organizations, The Credit Pros offers AI-assisted services, including easy-to-read credit reports and personalized score insights. With an A+ rating by the BBB and a comprehensive 100% 90-day money-back guarantee, they offer solid customer service for everyone looking into credit-related services.
With three affordable pricing tiers to accommodate all budgets, ranging from $69 to $149 per month (with a first work fee), The Credit Pros might be a good option for you if you’re looking to increase your credit score fast or achieve effective results.
If you want to learn more about The Credit Pros and how they can help you with your credit score, fill out a simple form or call (727) 306-8201 to get a free consultation with a credit specialist at no cost and with no obligation.
Ask for a Credit Limit Increase
If you used a lot of your available credit each month and always made your credit card payments on time, consider requesting a credit card limit increase from your credit card issuer. A lower credit utilization ratio is a great way to raise your credit score.
To illustrate, if you currently have a $4,000 credit limit and carry a $1,600 credit card balance, your credit utilization rate is 40 percent. But if you’re granted an increase of $2,500, bringing your credit limit to $6,500, your credit utilization rate drops to roughly 26 percent. Your credit score could increase, assuming you continue to make timely payments on the card and refrain from using it.
Credit card issuers are more likely to improve your request for a credit limit increase if you have a good or excellent credit score. Your debt-to-income ratio should also be on the lower end, and it helps if your income is sufficient enough to make the monthly credit card payments if the increase is approved.
Get A Credit Builder Account
Credit builder accounts are growing in popularity for a good reason: they can help you improve your credit scores quickly. Many are accessible through mobile apps and help you build credit or improve your scores while saving money.
When you open a credit-builder account, you’ll generally pay a small, non-refundable admin fee, followed by 12 to 24 monthly installments. At the end of the repayment period, you get the loan proceeds minus interest. Explore credit builder account options and give an account a try if you find a good fit. You’ll move one step closer to fixing your credit score, and you’ll build a cash stash during the process. That’s a win-win for your finances.
Pay Off Debt
Another effective way to improve your credit is to pay off debt. Of course, it’s always a good idea to start with high-interest debt, such as credit card debt, and avoid missing payments.
Consider using the debt snowball or the debt avalanche to pay off your credit card balances faster. You’ll continue to make the minimum monthly payments on all your credit cards, but any extra funds you have available to accelerate debt repayment are allocated to a specific card. Here’s a closer look at how each works:
- Debt snowball: Make extra payments on the card with the lowest balance each month. Once it’s paid in full, move on to the next card in line. Follow this pattern until you’re completely out of credit card debt.
- Debt avalanche: It works like the debt snowball. But instead of focusing on the card with the lowest balance, you pay extra on the card that’s costing you the most or with the highest interest rate.
Both methods also work with other forms of debt, like personal loans, student loans and auto loans.
Make Timely Payments
Consistent, timely payments will have a positive impact on your credit scores. If you’re forgetful, setting up automatic payments or reminders will always help you make on-time payments. It’s equally important to bring any past-due accounts current to avoid continued adverse credit reporting from late payments.
Don’t Close Old Credit Accounts
Length of credit history, or the amount of time you’ve used credit, accounts for 15 percent of your credit score. So, it can be tempting to close old credit cards you haven’t used in a while. But if they’re in good standing, let them stay put to avoid reducing your average credit age or reducing your long credit history and possibly damaging your credit rating.
Only Apply for New Credit as Needed
As mentioned earlier, each hard credit inquiry can ding your score by a few points. And if there are too many in a short period of time, the drop will likely be even more significant unless you’re rate shopping. That said, only apply for new credit as needed while you’re attempting to fix your credit score. Otherwise, any gains you make can quickly be erased by unnecessary hard credit pulls.
Improve Your Spending Habits
Another important factor to consider when working on your damaged score is how you spend your money. If you’re always in a debt cycle, it’s time to spend less than you bring to avoid sinking into debt, which can potentially damage your scores.
