How Long Does It Take To Improve Your Credit

Last Updated: August 21, 2019
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There’s no quick answer to how long it takes to improve your credit. However, you can predict more or less dependon a couple of factors. So how can you build up credit fast and what are the steps you should consider? We've summarized all you need to know.

In fact, it’s a blend of different things, like how much debt you have, your credit history and by how much you’re looking to change the score. Not to mention what you’re willing to do for that increase. For those who have actually been putting in the effort, by taking care of those negative things like errors, late payments, and past due accounts, anyone would want to start seeing results fast.

If your only negative is that you have a lot of debt you could definitely see quick improvements by paying the debt. For those who have past due accounts or bankruptcy, however, it can take longer.

The unfortunate truth is you’re not going to get changes overnight. But you can start getting improvement in as little as a month, and that’s pretty good too. Of course, you’ll have to pay attention to what happened to your score in the first place. But this is a good starting point.

How Long It Will Take? Consider Those Factors

Any kind of improvement to your credit is good, whether it’s small or large. For those who don’t have too major of situations on their credit report, it’s actually possible for you to start seeing some changes in a few weeks. If you want a lot of change, however, it’s going to take longer. You may spend months or even years, depending on:

  • Where You Are Now: If you have no credit you can create it in as little as a month. If you have damaged credit, however … that takes longer. By using a secured credit card it’s possible for someone to improve their score in as little as a year. But that’s only if they can moderate their use of the card itself. Plus it’s going to depend on all of the details of the credit card you have.
  • Your History: Next up, there are some really bad things that could be on your report. Things like bankruptcy, debt collection or repossessions can take a really long time to recover from. They stay right there on your credit report for as long as seven years. Fortunately, they mean a little less each year until they’re fully removed.
  • What You’re Looking For: What type of score are you actually trying to get? With the range between 300 and 850 you could have any kind of goals. If you can get above 760 you’re considered good, but that can be hard to do. Someone with a ‘bad’ credit score getting to that level can take a lot of time. Set yourself reasonable goals to start with.
  • What You’re Willing to Do: How hard are you willing to work to get that great score? Are you willing to put in the time and effort? Are you willing to be more frugal? Are you willing to pay attention to the payments that need to be made? How about using cash instead of your credit card? All of these things will help improve your score.

What Factors Affect Your Credit Score

When it comes to your credit score it comes from your credit report. Unfortunately, credit lenders don’t have to use only your credit score. They also use your job history, income, and types of credit.

When it comes to looking at your credit report, you should pay attention to the areas that weigh in most, like your payment history. Let’s take a look at what it all equals out to.

Payment History (35%) – Whether you pay your accounts on time or not is crucial. Your lender wants to make sure you can be trusted to pay them their money back. That means payment history determines your risk level.

Current Debt (30%) – This is where a lender will look at how much you owe on your current credit lines compared to what you have available. If you owe too much you are considered high risk. If you’re high risk it means you’re less likely to be approved.

Credit History (15%) – Here they’re looking at how long you’ve had credit. Having credit longer means you have a higher score in this section. But you need to make sure you’re using it responsibly.

Credit Mix (10%) – Do you have all credit cards or do you have a mix of credit cards and loans? Different retail accounts, mortgages, installment loans and more mean variety and that actually helps your score. You don’t need to have each one though.

New Credit (10%) – Finally, having a lot of new credit can look bad on your report. If you open a lot of new cards all at once it looks bad to lenders. It definitely makes you a higher risk candidate.

How to Monitor Your Credit Score

The most important thing is to monitor your score. You can do it yourself with CreditKarma or CreditSesame. Just keep in mind that these aren’t FICO scores. Instead, Credit Karma uses TransUnion and Equifax daily and Credit Sesame uses Experian monthly. Any kind of changes can be seen quickly on your results pages. And these are totally free services.

If you have certain types of credit cards you may also be able to get a free score, but the FICO one this time.

Discover, Barclaycard and First National Bank of Omaha each give you a free FICO score every month. Even Capital One has a service, through CreditWise, that offers free scores. All you have to do is talk with your credit card issuer to see if they have anything.

Building Credit Up Quickly

Think of your credit as an investment, and not a short-term one. This is one you’ll need to sit on for quite some time. But if you continue to make payments on time you’ll start to improve even faster. Just bringing your cards to current could mean improvements every 30 days, though they’ll be small ones.

Other things you can do to bring your score up fast are paying off or at least paying down some of your large balances and getting an increase on your limit. If you can do it before your statement closes out for the month it can make a dramatic difference. You’ll be able to get your credit utilization down further (maybe even below 30%) and that makes a huge difference. Even better, you may be able to get creditors or collectors to delete accounts when you make the payment.

Finally, make sure any false information on your card is removed.

Free copies of your full report are always available from the three credit bureaus. All you have to do is go to their websites or AnnualCreditReport.com to find out how to request them.

Best Ways to Build Credit For The Long Run

When you have any kind of change to your credit or you do anything with credit it affects your credit score. That means you need to pay careful attention.

Pay On Time

On-time payments are going to be one of the best things you can do. After all, your payment history is responsible for a whopping 35% of your score. Within just six months it can be a huge factor in what happens. Plus it can improve the overall health of your report if you start making it a regular thing.

Get Some Diversity

Having more than just plain old credit cards is going to be a good sign that you’re a responsible person. Of course, you have to make sure you’re paying them off. If you do then lenders think you’re actually lower risk. This type of diversity and payment history shows you’re a more responsible person, and you can juggle more accounts.

If you’ve never had a credit card before but you’ve had loans opening a card could be a good idea. It could give you more variety and improve your score overall.

Secured Cards

People who don’t yet have credit or who have had some problems with credit in the past may not be able to get a credit card. If that’s the case a secured card might be a great option.

Getting a secured card requires you to put in a deposit for your limit. If you want a specific credit limit you have to put that much money in the account. Then you give the bank the information about where that money is stored. That way they can take it if for any reason you don’t pay your card. If you’re lucky you might be able to get interest from the account.

For those who don’t have good credit, it can help banks to reduce their risk. That makes them more likely to give you credit.

If you get a secured card it’s meant to help you rebuild your credit over time. That way, you can later get an unsecured credit card.

Transfer Your Balance

If you can get a new card with a 0% balance you can transfer old debt to a new card. You’ll get a small hit to your credit score from opening a new card. On the other hand, increasing your available credit (but not taking on new debt) gives you a boost as well.

Keeping your old account and keeping a new account without adding debt reduces your utilization rate. That means that your score can actually start to go up.

That utilization rate, or balance-to-limit ratio, compares how much you owe to how much is available. What the credit score pays attention to is how much you use on each card and how much you use overall. If you can keep all of these ratios low it shows that you’re a responsible card owner. That benefits your score a lot.

You may think that when you pay off a card you should close the account. Actually, that can be a problem. Your age of credit history is a big part of your score and keeping old accounts keeps that around. The only thing you need to do is make sure you don’t add to your debt again. And watch for fees that might be associated.

Things That Hurt Your Score

You want to be a smart consumer and that means knowing how to protect your credit. It means knowing when you should and shouldn’t use credit and how you can avoid the debt trap.

Let’s look at some of the worst things you could do.

  • Pay Late – Making your payments late gets reported to the bureaus and that lowers your score.
  • Max Out Your Cards – This makes you look like a big risk. And it makes you look like you aren’t responsible. That’s going to cause your score to start dropping, fast, especially if you’re above 50% utilization.
  • Lots of Cards – One or two credit cards might help you build up a score, but too many will make you look like a risk. And they make you look less responsible.
  • Cosigning For Someone Who’s Not a Good Risk – If you know someone who isn’t a good risk and you sign for them you could end up on the hook for bad decisions they make.
  • Canceling Accounts – When you close an account it changes your age of credit history and makes it look like you don’t have experience. Lack of experience translates to being a bigger risk, as far as your score is concerned.
  • Not Paying Attention – If you don’t look at your credit report you could be in big trouble. You could end up with mistakes on any of those credit reports and you won’t even know it. Those mistakes could end up costing you a job, a house or any kind of credit you want.