How Long Does it Take to Repair Credit?

If you’re like many Americans, your credit may have suffered some damage especially if you suffered from financial difficulties and relied on credit cards and other sources of debt to stay afloat. There are several things that you can do to rebuild and repair your credit, but the process is a bit slow. So, if your credit has suffered from damage, how long will it take to repair your credit? We will discuss the answer to this question in much detail below.

How Long Does it Take to Repair Credit?

It is very difficult to calculate the amount of time it will to repair your credit because every situation is different. How long it takes to repair your credit depends on the amount of damage that has been done to your credit. Credit repair can take anywhere from a couple of months to several years, depending on what is in your credit file. That said, most negative items will be removed from your credit report within seven years measured from the date your first became delinquent on your account.

If you have negative information on your credit report, such as late payments and/or collections accounts, such items will remain on your credit report for seven years from the date on which you first became delinquent on the account. On the other hand, if you filed for Chapter 7 Bankruptcy, this will remain on your credit report for 10 years from the date on which you filed for bankruptcy.

Negative information that’s added to your credit report will have the biggest negative impact on your credit score when it’s first added. As the negative information ages, its impact on your credit score will begin to lessen until the item is automatically removed from your credit report.

How long it takes to your repair your credit depends on the following factors:

  • The type of negative information in your credit file
  • The number of derogatory marks on your credit report
  • The age of the negative information in your credit report
  • Your credit score prior to having negative information added to your credit report

Recovering from something like a missed payment in much quicker than recovering from a more severe item, such as a bankruptcy, foreclosure, or charge off. So, the amount of time it will take to repair your credit depends on the type of negative information on your credit report.

Also, how long it takes to fix your credit depends on where your credit score was prior to your score dropping. The higher your credit score, the longer it will take to rebuild your credit. For example, if you have a 795 credit score it will take you longer to get back to that score than it would take a person who had a 680 credit score to get back to that credit score.

One thing is for sure, repairing your credit can take a long time. There are no shortcuts that can speed up the process. If you have negative items on your credit report, the only way to fix them is to wait for them to be removed. Most derogatory items will remain on your credit report for 7 years from the date of delinquency.

How long does negative information remain on your credit report?

  • Late payment – 7 years
  • Collection account – 7 years
  • Hard inquiry – 2 years
  • Charge-off – 7 years
  • Closed account w/ all payments made – 10 years
  • Closed account w/ delinquent payments – 7 years
  • Foreclosure – 7 years
  • Chapter 7 Bankruptcy – 7 years

How to Repair Your Credit?

Before diving into how you can repair your credit score, you should know what factors influence your credit score.

  • Your Payment history – 35% of your credit score
  • Credit utilization / Account Balances – 30% of your credit score
  • Length of credit history – 15% of your credit score
  • Hard inquiries – 10% of your credit score
  • Credit Mix – 10% of your credit score

Make Your Payments on Time

Your payment history accounts for 35%, so if you want to repair your credit, the best thing you can do is open a secured credit card and make all of your payments in full and on time. Having an account with excellent payment history will assist you with building excellent credit. Also, if you have other accounts, make sure to make all of your payments on time because your payment history accounts for the largest portion of your credit score.

Pay Down Your Balances

Your credit utilization (how much of your available credit you’re using) accounts for 30% of your credit score. So, paying down your balances will surely improve your credit score. As a rule of thumb, you should never utilize more than 30% of your available credit. For the best possible impact on your credit score, you should aim to keep your credit utilization between 5% and 10% of your available credit.

Improve the Length of Your Credit History

The age of your accounts makes up 15% of your credit score, so if you want to repair and improve your credit score, you should keep your old accounts that are in good standing open for as long as possible. The older your accounts, the more of a positive impact on your credit score they will have. We know that it may be tempting to close down an old account that you barely use, but you should consider leaving it open as it will have a positive impact on your credit score.

Don’t Apply for Too Many Accounts

If you want to repair your credit, you should avoid applying for too many loans and credit cards within a short period of time. This is so because every time you apply for an account, a hard inquiry is placed on your credit report. Although a single hard inquiry will not hurt your score by much, multiple inquiries within a short period of time can hurt your credit score. So, only apply for as much credit as you actually need. Instead of applying for accounts that you won’t be approved, research the requirements for the type of credit card or loan you’re applying for before applying.

Improve Your Credit Mix

Your credit mix accounts for 10% of your credit, so if you’re trying to repair your credit and improve your credit score, you should create a diverse mix of account types, such as a credit cards, auto loans, home mortgage, department store cards, and student loans. The more diverse the accounts that appear on your credit report, the better it is for your credit score. The credit reporting bureaus reward persons with diverse accounts because it shows lenders and creditors that you’re able to handle different types of debt.

Review Your Credit Report & Dispute Any Inaccuracies

If you don’t already, you should get into the habit of periodically reviewing your credit report. Review your credit report and if you find any inaccuracies on your credit report, you should dispute them with the credit reporting bureau displaying the incorrect information.

Using a Secured Credit Card to Repair Your Credit

The best way to rebuild your credit after it has sustained significant damage is to open a credit card, pay your bills using the credit card, and making full and timely payments on the credit card.

Most of the time, if your credit score is too low, you will not be approved for a regular unsecured credit card, so you’ll have to resort to a secured credit card.

A secured credit card will have the same impact on your credit score as a regular unsecured credit card. The only difference with a secured credit is that you will have to pay a security deposit to obtain the credit card.

Your credit limit on a secured card is determined by the security deposit that you will be required to deposit with the bank or card issuer. The security deposit determines your credit limit.

For example, if you place a $1,500 security deposit with the bank, your credit limit will be set at $1,500. Typically, if you make all of your payments on time, the bank or card issuer will return your security deposit to you within 12 to 18 months of opening the account.

Once your security deposit is returned, your account will be converted into a regular unsecured credit card. Secured cards show up on your credit report, and if you make your payments on time, your secured card will improve your credit score the same way a regular credit card would.

So, open a secured credit card and build a good history behind this card to repair your credit and improve your credit score.

Also, remember to keep the balance on your secured credit card below 30% for the account to have the best impact on your credit score.

Credit Score Planet Frequently Asked Questions

1. How long does credit repair take?

The amount of time it will take to repair your credit depends on how much damage you have done to your credit. If you have something like a single missed payment, your credit score will recover fairly quickly. However, if you have charge offs, collection accounts, and bankruptcy on your credit report, it will take several years for you to repair your credit score. That said, one thing is certain, as time passes from the date of delinquency or derogatory mark was added to your credit report, the more your credit score will recover.

2. How fast can you raise your credit score?

If you have a poor credit score, you can raise your credit score fairly quickly by making payments on your accounts and paying down your balances. That said, the higher your credit score becomes, the more difficult it becomes to improve it.

3. How long does it take negative items to be removed from your credit report?

We have provided you with a list of how long it takes negative items to be removed from your credit report. It takes approximately 7 years for most negative items to be removed from your credit report.

4. How can I quickly repair my bad credit?

You can improve your credit score fairly quickly by making timely payments on your accounts and paying down the balances on your accounts. Also, you should explore the option of disputing any inaccuracies that appear on your credit report. That said, there is no quick way to repair your credit. Credit repair is a time intensive process that could take several years to accomplish.