A low credit score can be a barrier to many opportunities. But how quickly can you rebuild credit? The short answer is there’s no definite time frame; there are a lot of factors involved. If you want to rebuild bad credit, you can use a credit repair service to help. While this can remove some negative information from your credit report, how you manage your credit matters most. The information below provides a look into how to build credit over time.
How Long Does It Take to Rebuild Credit?
There is no standard timeframe. Nonetheless, bad credit does not have to stick with you for life. You can make improvements, but how long this takes depends on your credit history. The more late payments and negative marks on your credit report, the lower your credit score and the longer it may take. A good FICO score is typically 670 or higher, while a poor credit score ranges from 300 to 579. If you have excellent credit, it can be as high as 850.
What Factors Affect Your Credit Score?
There are many factors used to measure your credit score. Everyone’s credit situation is therefore unique, making it hard to predict how long it takes to rebuild credit. But here are some factors to consider:
- Payment History: Paying your bills on time accounts for 35% of your credit score, while balances and credit utilization account for 30% of your score. A high credit utilization ratio can drive it down.
- Age of Negative Information: In addition to the length of your credit history, the age of negative marks matters too. The impact over time will be less if you manage your credit responsibly.
- Number of Negative Marks: One or two late payments will do less damage than if you make a habit of not paying your bills on time. It is extremely important to pay not only credit cards on time, but also your phone, utility, and streaming subscription services.
- Where You Started: With good credit habits, each positive change you make can raise your score. It’s also quite easy for your credit score to drop once you’re at a high tier, so good habits must be maintained.
- Severity of Negative History: A sporadic late payment is easier to recover from than, say, a charge-off, court judgement, bankruptcy, or foreclosure.
These are just some factors that affect your credit score and how long it can take to rebuild bad credit. The specific details matter. For more information, read our blog article about how long negative information stays on your credit report.
How to Rebuild Bad Credit
If you have bad credit, remember it takes time to rebuild it. However, these are some smart steps to start with:
- Pay Your Bills on Time: Credit cards and loans should be prioritized. They’re the ones that are reported to the credit bureaus. Your payment history is the most influential factor on your FICO score.
- Reduce Your Credit Card Debt: Bring your credit utilization down from your current debts; ideally, your balance on each card should be below 30% of your limit. You can also ask for limits to be increased, which reduces your credit utilization ratio.
- Dispute Inaccurate Information: Errors such as missing accounts, false reports of missed payments, and incorrect credit limits on your credit report can lower your credit score. Dispute any error you find, as the bureaus are required by law to correct them; also, consider credit repair as an option.
Contact American Credit
If you need credit repair, we provide credit restoration and consultation services to Los Angeles clients. Our approach involves a pre-litigation process that is more effective than dispute resolution. For professional insight and expertise, an accurate analysis of your situation, and to start rebuilding your credit, contact us today and get a free consultation.