Do not anticipate your credit to be resolved in a timely manner. The easiest ways to fix your credit is to pay back any debts and if you can use them lightly, and taking advantage of an old card.
How long does it take to repair your credit?
There are steps to making a path back to improving your credit score, but it is a slow process which may take longer than one anticipates. But what is the first step in getting your credit back to where it is supposed to be? And how long will it take to repair your credit?
Get and check your credit report
First and foremost, check your credit report as often as you can. The three credit bureaus are obligated to release your credit report to you once a year upon your request. It should be noted that some companies may report to only one credit bureau, while some may report to all three of them. It is preferable that you obtain your credit report from all three credit bureaus, so you do not miss anything. Thoroughly check your credit report for credit errors, which is common, such as a paid bill marked as unpaid. You need to check your credit report so you can notice and dispute credit errors.
Paying back your debts
After checking your credit report and your debts, you need to start making a repayment plan. This will give creditors the impression that you are willing to take up the responsibility and that you are doing your best at being reliable, improving your creditworthiness. The debt can be overwhelming, but even if you cannot pay the full amount you should pay at least the minimum.
Say, you owe a lot of bills you cannot pay back, concentrate on one at a time and try negotiating with your creditor to help with your repayment plan. Although paying and erasing your debts is a good start to repairing your credit, that does not mean that it will happen overnight. These records will still show on your report for up to seven years, or ten for bankruptcies. Consistent on-time payments will make the difference when a creditor looks at your credit report.
What is the best way for starting to pay back your debts and repairing your credit? Here’s what you should be considering:
Pay down your credit cards: Paying off your credit cards will instantly help improve your credit scores. There should be a sufficient gap between the amount of credit used and the availability of credit limits, with ideally below 30% of the credit limit on each card.
Use your cards lightly: Do not rack up balances more than you have to. You can maintain a good credit score by maintaining a good spending limit. It is important that you track your spending continuously and aim to spend below 30% of your credit limit.
Use an old card: When you stop using old credit cards, the issuers may stop reporting those accounts to the credit bureaus. That is why it is recommended that you use your old credit cards every few months even in small amounts and pay them off in full when the statement arrives, because the older your credit history, the better.
Goodwill adjustment: If you make a request in writing, a lender might simply agree to erasing that one late payment from your credit history. If your record with a company is good and your credit has been good, chances of a “goodwill adjustment” would be higher for you. A long-term solution might be that you ask for a “re-age” on a more troubled account. If the account is still open, the lender can erase previous delinquencies if you make a series of on-time payments of 12 months or so.
Although all of these factors will help you repair and improve your credit score, this is a process and it will take time for your credit score to be back on track. Experts have estimated that the average time it takes for a credit score to be rebuilt to the point at which you can be accepted for a major credit card, or get approved for a loan, can take up to two years, so be consistent on your payments, keep your balances low, and do not overcharge your limit.