How Long Does It Take to Improve Your Credit Score?
As you probably already know, a good credit score can be difficult to achieve, especially if you’re working to improve it from a previously negative state. There are many ways to improve your credit score. Unfortunately, they all take different amounts of time.
There is no universal answer for how long it takes to improve your credit score, but there are a few things to consider when determining how long it could take for you. Improving your credit score is a time-consuming process that takes patience and diligence. Having a general understanding of the factors that affect how long this process can take is helpful for coming up with a plan to improve your credit. Here are some things to consider:
Your Starting Point
No two people’s credit reports are the same. Everyone’s situation is unique, and everyone has a different starting point. While some are focused on boosting their credit, others may be focused on rebuilding. Think about your starting point and which factors are currently affecting your credit score the most. There are five main areas that influence your credit score:
- Payment history
- Credit utilization
- Length of credit history
- Credit mix
- New credit lines
Each of these factors plays a different role in determining your score. For example, payment history and credit utilization have the biggest impact, while the other three have much smaller impacts. Look at your credit report, and see which of these are hurting your credit score the most. Once you determine your starting point, you’re better equipped to create a plan to improve your credit. This gives you a better idea of approximately how long it will take to improve in a given area.
Events That Harm Your Credit
There are several events that are harmful to your credit, and depending on severity, these events take different amounts of time to recover from. For example, significant events, such as chapter 13 bankruptcy, late payments and foreclosures, each stay on your credit report for seven years. Meaning, it will take at least seven years to recover from these events. Smaller events, such as closing an account, maxing out a credit card or opening a new account, can take as little as three months to recover from.
Take a moment to look at your credit report for any events that may have had a negative impact, then research how long you can expect it to remain on your credit report. This will help you estimate a timeframe for which you can expect to see your credit score start climbing back up!
Top Ways to Improve Your Credit Score
Regardless of your starting point or any events bruising your credit score, there are several things you can do to boost your credit. Here are a few simple options to start with:
- Make payments on time: Late payments have the largest negative impact on your credit. So, try to keep your accounts up-to-date and never fall behind on any payments. If you struggle with this, you may consider finding third-party assistance. Services like the ones provided by AutoPayPlus to match your payments with your paychecks through custom billing schedules to prevent late payments.
- Reduce credit utilization: Credit utilization is the ratio of credit you’ve used and the credit you have available. Having more credit available than used is better for your credit score. It may help to change your payment schedule to include more frequent payments. Paying loans and credit cards through AutoPayPlus helps you pay them off faster, which also works to reduce your credit utilization ratio.
- Use a secured credit card: If your credit score is below average, try using a secured credit card. These cards require a deposit that’s usually equal to the line of credit amount, and this allows you to start building up your credit by showing a history of responsible use and on-time payments.
- Minimize credit inquiries: Every time you apply for a new account, your credit takes a hit. Although it’s tempting to open a new account at your favorite store to purchase all their new and exciting items, be mindful of how this can impact your credit.
- Pre-qualify for new accounts: Many lenders now have a feature that allows you to see if you pre-qualify without hitting your credit. This is a good feature to opt for whenever possible.
Increasing your credit score is a time-consuming process that requires patience and commitment. Although there is no one-size-fits-all answer for how long it will take to improve your credit score, these are all things you should consider while creating your plan. At AutoPayPlus, we partner with Transunion® to help you with all your credit needs. Manage your loans all in one place with payment plans tailored to you and monitor your credit score with AutoPayPlus. Give us a call at 800-894-5000 or schedule an appointment with a Payment Concierge to get started.
