This post may contain affiliate links. Please read my disclosure for more information.
You would think that we would’ve been taught more about credit scores, loans, and mortgages in school. Unfortunately, these are topics that often don’t come up until we are fully grown.
And by then, we may have already made some financial mistakes!
Keeping payments on track is such an important thing to do, and failing to do so will result in the lowering of your credit score.
This will impact a lot of aspects of your life, including your ability to take out loans, and make investment decisions. A low or bad credit score can also mean you pay a lot more interest on purchases like cars and houses.
If your credit score is particularly low, you may be worried about the repercussions. You may be wondering if there is anything you can do to solve this problem and repair your credit.
Well, there is!
In this article, we are going to look into how long credit repair takes, and how you can do so.
What is a Bad Credit Score?
As a general rule, a bad credit score, or a poor credit score, is anything below 650. However, while 600-650 is considered a poor score, it is usually when you go below 500 that you are in more serious trouble.
If your credit score is below 650, you may feel concerned, but you are not too far away from boosting your score to the average, which is around 700.
However, If your score is lower than 500 you will definitely want to think about repairing your credit as soon as possible.
How Long Does Credit Repair Take?
Sadly, there is no quick and easy solution to fix your credit, so it might be challenging to estimate how long your credit repair would take. In general, credit repair takes 3-6 months. But, it can take longer in some cases.
How significant your credit problems were, how they damaged your financial status, and a number of other factors determine how long it will take you to rebuild your credit report.
Depending on your specific scenario, improving your credit rating could entail a few months, or several years, of dedication. For example, if you find a fraudulent unpaid account on your report, as soon as you can get that removed your credit repair will happen.
Credit repair can also happen quickly if you find other inaccuracies that just need to be removed.
However, if you have a ton of unpaid balances dragging your credit score down, it may take you years to pay these off.
And, of course, if you hire a credit repair service like Credit Saint, it may help speed things up.
Fortunately, if you know what should be done next, it is feasible to restore and rebuild your credit.
Related reading: What is a Tradeline?
The Best Ways to Repair Your Credit
Every person’s situation is different when it comes to their credit scores, credit history and why they need credit repair.
Perhaps you have had trouble paying off loans in the past, or you have missed payments that you have forgotten about over the years.
Since everyone’s situation is different, and some may be better or worse than others, it is difficult for us to tell you exactly how to repair your own credit.
You can also enlist the help of one of the 7 best credit repair companies and likely speed your credit repair up.
However, we can provide you with some steps to take to set you on the right path. By following our guidelines below, you will be able to start your journey to rebuilding your own credit score.
If you are trying to repair your credit after declaring bankruptcy, check out these tips.
Review your credit score
Reviewing your credit reports to look for potential inaccuracies and errors is the first step in credit repair.
It will be difficult to pinpoint exactly what went wrong and, consequently, how you can solve it unless you look at your credit reports.
You may view your credit reports using a variety of applications and websites. While some are cost-free, others charge a price.
As using some credit report checkers may actually drop your score automatically, be cautious to choose a reliable site that won’t affect your credit score when you have your report pulled. You can actually get your report by contacting a credit bureau like Experian.
Check your reports again to see what they state and record any inaccuracies. It can take anywhere between one and two hours to thoroughly check all three credit reports if you’ve never checked one previously.
You may discover that you owe money to certain companies, and this is bringing your credit down. Or you might find something fraudulent that requires you send a dispute letter. In these cases, the next steps for credit repair to take are fairly simple.
However, there may be bigger issues that will be more difficult to deal with, but you can only move forward once you have identified what they are.
More reading: Credit Saint vs. Lexington Law
Pay off all your current debts
This one should go without saying, but it will quickly raise your credit score and repair your credit.
Many people’s credit declines are frequently caused by outstanding bills and unpaid debts, which can happen quickly if you are forgetful or if you take out a loan that you cannot afford to repay.
You must put your debt payments on time moving ahead as an utmost importance before doing anything else in the credit repair process. You would be better off waiting till your credit has been repaired before taking out any new loans or credit.
Additionally, paying off any outstanding debts and getting any accounts that are currently past due up to date will help with building credit. Late payments are a credit killer.
When you look at your credit report, seek out any unpaid debts, and make it your priority to pay them back. The faster you pay these back, the faster your credit repair will take.
In addition, you may find fraudulent debt that is dragging down your score. Many years ago my credit score dropped into the 500s! And, I didn’t even know it until a collection agency was calling me looking for an unpaid debt that wasn’t even mine.
I had to go through some steps to prove the fraudulent account was not mine with the 3 credit bureaus. I had to separately contact each credit bureau by mail.
But, once I did that, the debt was removed from my credit report and my credit score went way up.
You should frequently review your credit reports to make sure something like this hasn’t happened. Keeping track is one thing to help you get a good credit sore.
More reading: The 50/30/20 Rule of Budgeting
Pay off/reduce all credit balances
If you use credit cards responsibly, they can be a terrific convenience. If you don’t keep track of your expenditures, however, it’s too easy to get into debt, which will negatively impact your credit score. Your credit card debt load will absolutely affect things.
Your utilization rate will need to be taken into account. This is computed by adding up all of your credit card balances, scaling them by every one of your credit card limitations, and then calculating the result.
You want your credit utilization ratio to be as low as possible. If it is too high, it will impact your credit with the credit bureaus negatively. Keeping your credit limit much higher than your debt will help you with this.
Your credit report and scores will benefit if you lower or pay off any outstanding balances on your credit cards.
Although it won’t happen immediately, you will gradually start to notice an improvement in your credit.
It may seem contrary, but you can also open a new credit card but then only use it for things you can pay off each month.
This will help to lower your utilization rate because you will have increased your available credit, but not being using it. And, as on time payments are reported to each credit bureau, that will help your score as well.
More reading: Lexington Law Firm Review
Hire A Credit Repair Company
One thing that can help you with the credit repair process is to hire a company that can communicate with the credit bureaus on your behalf.
A credit repair company can do a lot to repair your credit when it comes to removing inaccuracies or fraud. And, this can help speed up the process. They will pull your report, send a dispute letter to each credit bureau and stay on top of your report.
They will look at your credit history and see what can be fixed. And of course, paying someone to help with your credit repair will certainly be less stressful.
Frequently Asked Questions
What is the Quickest Way to Repair My Credit?
There is no catch-all, always will work answer to this question. But, here are some tips to help speed up your credit repair process:
- Hire a credit repair company to help you like Credit Saint, Sky Blue or Lexington Law
- Purchase a tradeline which adds the positive credit history of someone else to your credit report.
- Take out personal loans to use to pay off all your credit card debt. If your credit is really bad you can get a credit builder loan to rebuild credit.
How Long Does it Take to Fix a 500 Credit Score?
Of course as mentioned, it depends on your particular situation. But, in general, you should be able to build your score up from 500 to 700 in 6-18 months if you are super careful and aggressive.
Moving a low credit score to an excellent credit score can take some time though. As your score increases though, there will be more things like personal loans that you can access for help.
Keep in mind you can get a mortgage for a home with a score as low as 620.
If your credit score is particularly low, it is important not to panic. This is a solvable problem, and while the issue may not get fixed overnight, it will happen once you put in some time and effort.
Be sure to check out your credit reports, and seek out why your credit score has dropped so low. Once you have identified the issues, you can begin to work on fixing them.
We hope you found this article helpful.
NEXT SMART MONEY POSTS:
FAVORITE BUDGETING AND MONEY TOOLS:
Acorns which takes your spare change invests it for you to help you save and make more money.
Personal Capital for money management. Get a money dashboard, free analysis and personalized wealth advice.