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Credit 101: How Long Does It Take to Rebuild Credit?


While bad credit can take seven to 10 years to be removed from your credit report, you don’t have to wait that long to start improving your credit health. How long it takes to rebuild credit varies with each person, but taking appropriate steps now could result in future amendments to your score taking the appropriate steps now could benefit you in the long run.

How Long Does It Take to Rebuild Credit?

It’s difficult to predict how quickly anyone’s credit score will change because it depends on the details contained in each individual’s report. Because it takes at least seven years for credit details to be removed from a credit report, someone with several missed payments over the past two years could expect it to take longer for their score to improve. Someone with a few missed payments six years ago could see a faster improvement, provided the payment history since then has been excellent.

How to Raise Your Credit Score Immediately

If your credit report contains inaccuracies that negatively impact your credit rating, having them removed may result in an immediate lift to your score. Get a copy of your free annual credit report and look at each item carefully. For example, if a debt was mistakenly applied to your name, or if you have a record of a delinquent account that you always paid on time, you can apply to have the item removed.

Improve Your Credit Utilization Ratio

Your credit utilization ratio is the part of your credit report that shows how much credit you’re using compared to what you have available. For example, if you have $20,000 in available credit, and you’re using $5,000 of it, your credit utilization score would be 25 percent. Paying off outstanding debts to keep your credit utilization below 30 percent may positively amend your credit score. A credit utilization ratio of 20 percent or lower is even better.

Build Good Credit Habits

Getting rid of your credit cards and closing your loans probably isn’t the answer to a bad credit score. In fact, closing down accounts may hurt your rating. The better solution is to manage the credit you have wisely by making timely payments and controlling your spending habits. Showing a history of good paying habits can improve your score over time.

If you don’t have any credit available and you don’t qualify for a credit card, consider applying for a secured credit card. These cards work just like regular credit cards, except you have to put down a deposit ahead of time. Depositing $500 onto the card, for example, gives you $500 to use. Unlike a checking account, your monthly payments on the card can be included in your credit report.

Any recommendations or analysis preformed or provided on the website is not intended to represent financial advice or guarantee future results. Prior to making any investment or financing decisions, please consult a qualified attorney or financial advisor.

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