If you’re wondering how long does credit repair take, you’re not alone. According to Experian, almost one-third of people in the US have a bad credit score, with their reasons ranging from a couple of late payments to full-blown bankruptcy.
The amount of time it will take you to repair your score will depend on various factors. Negative information can stay on your report for up to 10 years, so your payment history – and the severity of your finances – will dictate how long the process takes.
In general, the process can take anything from a couple of months to several years. The range is quite extensive, which is why here, we’ll take a closer look at how credit repair and rebuilding work. These factors will help you determine how credit repair may take for your unique circumstances.
- 1 Do I Need Credit Repair?
- 2 What’s The Difference Between Credit Repair and Rebuilding?
- 3 What Is Credit Repair?
- 4 The Credit Repair Timeline
- 5 What Is Credit Rebuilding?
- 6 What Are the First Steps Towards Repairing Your Credit?
- 7 Conclusion: How Long Does Credit Repair Take?
Do I Need Credit Repair?
You might have learned to live with your bad credit, but it will hold you back from individual financial decisions in the future. Qualifying for a credit card, renting an apartment, even buying a house – you’re far less likely to get accepted for any of these if your score is poor or bad.
If you need a credit card or apartment as soon as possible, employing a verified credit repair company can speed up improving your credit. These companies will review your reports and address the negative items with a credit bureau on your behalf.
Only you can balance the cost of this service against your existing debts and decide whether it’s the right decision for you.
What’s The Difference Between Credit Repair and Rebuilding?
You’re likely to see the terms ‘credit repair’ and ‘credit rebuilding’ used interchangeably. However, many people find it helpful to think of them as separate things. Credit repair is usually the first step towards the much more protracted process of rebuilding your score.
What Is Credit Repair?
Credit repair refers to the act of removing negative items – including late payments, collection accounts, and bankruptcy – from your credit report. The information on your report is what the three major credit bureaus use to determine your score. They generate the score according to your status in regards to the following five factors:
• Your payment history
• Whether or not you’re currently in debt (or have been in the past) and how much you owe
• The length of your credit history
• How many accounts you have
• Your credit applications
The better your record, the higher your score. A better rating means you’re far more likely to qualify for new contracts.
The Credit Repair Timeline
So, how long does credit repair take? What can you expect as a timeline for your situation?
Removing negative items isn’t always a speedy process. Late payments, civil judgments, and chapter 13 bankruptcies will stay on your record for seven years. Chapter 7 bankruptcies will remain for ten years.
If these items are accurate, you can’t remove them from your record early. If anything on your record looks suspicious, you can submit a dispute to a credit bureau. At best, a creditor may have misreported you. At worst, you may have been a victim of fraud.
A credit bureau must respond to your query within 30 days. It may take several months to resolve your dispute. However, a few months is much quicker than waiting for genuine items to expire from your report.
What Is Credit Rebuilding?
Once you’ve repaired your report by removing any adverse items, the next step is to start rebuilding your credit.
The aim of credit repair is to make sure that your score isn’t actively bad. The objective of credit rebuilding is to improve your score by adding positive progress to your record.
You can do this in several ways. One of your priorities should be ensuring that you make all of your future payments on time. Regardless of which agency you get your score from, your payment history is the most significant factor that determines your score.
If you can’t meet the minimum repayment amount yet, you should contact your creditor as soon as possible. Find out if you can negotiate a different arrangement while you take steps to meet the full amount.
What Are the First Steps Towards Repairing Your Credit?
It may be disheartening to hear that there’s no quick-fix answer to the question ‘how long does credit repair take.’ But the good news is that you can start your journey towards better credit today. Here are some simple steps that will help you gain control of your score.
1) Order a Copy of Your Credit Score
If you suspect that your credit report is bad, but don’t know your exact score, you should order a copy from a reputable credit bureau or agency. This report will show you what you’re dealing with so that you can address the problem immediately.
2) Bring Outstanding Accounts Up-to-Date
If possible, pay any outstanding accounts as soon as you receive your score. If any of your accounts are approaching their due date, prioritize these. Set up automatic payments to ensure you won’t miss the deadline again.
3) Check Your Credit Utilization
Credit utilization refers to the percentage of available credit that you’re using. The percentage comes from calculating the sum of the balances of all of your accounts and dividing this number by the total of your credit limits. Most professionals advise that a good utilization percentage should be no higher than 30%.
Check your utilization online. If any of your accounts are higher than others, try to bring down the percentage. You can do this by paying your balance off early or decreasing your spending on that card.
If you have concerns about ‘how long does credit repair take’ because you need faster solutions, these methods are some of the quickest ways to improve your credit score.
Conclusion: How Long Does Credit Repair Take?
There’s no quick-fix to the question “how long does credit repair take.” However, lowering your utilization and meeting outstanding payments are effective ways to improve your score as soon as possible.
Even small changes can make a significant improvement over time. By taking action now, you can start working towards repairing and rebuilding your score today.
Matt is the founder of CreditInformative.com and holds a Bachelor of Commerce (BCom) with a major in Finance and Marketing and a Bachelor of Arts (BA) with a major in Economics and History. Matt’s advice has been featured on Business Insider, Fox Business, Newsday, Money Under 30 and many other publications.