Having a bad credit score can be a major obstacle when it comes to getting approved for loans and other financial products. But, with the right steps, you can repair your credit in as little as three months. Unfortunately, there is no quick fix for bad credit, and the time it takes to rebuild your credit history depends on the severity of your credit problems and how your credit history was affected. In either case, there are steps you can start taking right away to help get your credit back on track.
You should begin by getting pre-approved for a loan product to get a good idea of whether you'll qualify or not. This counts as a soft consultation and won't hurt your credit score. Additionally, you should avoid applying for new credit cards more than once every six months. You can also offset negative records in your credit reports with an avalanche of positive information.
A few months of responsible credit card use will begin to rebuild your credit, and 12 to 18 months may be enough to turn a bad credit score into a good or fair one. As with repairing late payments, time is in charge here, but you can take steps to improve other areas of your credit rating to balance the impact of foreclosure or bankruptcy. It's also important to review your credit report from each of the three major credit bureaus (Experian, TransUnion, and Equifax) from time to time for errors. You can build your path from bad to fair or better credit with a single insured card, at which point you can qualify for more attractive unsecured credit cards. If you pay for a credit repair service, the company will help you expedite so that this is done as quickly as possible. The time it takes to repair your credit depends on where the damage occurred.
You can estimate how long it will take you to rebuild your credit and how certain financial decisions might affect your score using WalletHub's free credit score simulator. After that time, foreclosure will be removed from your credit report and will no longer count toward your credit score. You'll also see Chapter 13 bankruptcies that stay on your credit report for seven years after you file, but a Chapter 7 bankruptcy stays on your credit report even longer, 10 years from the filing date. Therefore, keep track of your payments to create a positive payment history and take steps to reduce your credit card debt burden so that your credit utilization rate is as low as possible. Bad credit is not a life sentence, which is good news for about a third of people with credit scores below 620. With the right steps and commitment, you can repair your credit in as little as three months.
Keep reading to learn how to improve your credit score and how long it will take you to repair it after it has been affected.