You might be asking yourself, “How quickly can I increase my credit score?” While there’s no one-size-fits-all answer, there are things you can do to help move your credit score closer to where you want it to be, especially if you want to make a big purchase or get a more limited credit card.
Simply put, how long it takes to increase your credit score depends on why you need to increase it in the first place. If you have a low score because you don’t have much credit history, or if you’re just starting your credit-building journey, you may be able to increase your score within a few months.
It may take time if you have a low debt-to-income score, but finding the right debt relief options can get you back on the right track.
If your credit has been damaged by missed payments or bankruptcy, rebuilding a healthy credit score will require more patience — in some cases, a full recovery could take years.
Think of your credit report as a history of your past credit transactions. For example, if you have always made late or missed payments, that negative record can stay on your report for a long time.
Let’s take a closer look at how long various negative marks stay on your credit report, how long it takes to raise your credit score, and some of the main steps you can take to improve your credit score.
The starting point is important to improve your score
Your credit score isn’t just a rating scale. It’s usually determined by a formula that takes into account five main factors: In order of importance, each of the following factors can raise or lower your credit score:
- Payment History (35 percent)
- Credit utilization (30 percent)
- Length of credit history (15 percent)
- Credit Mix (10 percent)
- New Credit (10 percent)
Considering that a history of always making on-time payments is the most influential factor, getting a credit card for the first time can help you raise your credit profile. Paying your cards on time every month will boost your credit score, so if you make it a habit, you will be able to boost your credit score in no time, as long as you don’t miss any credit card payments.
Your credit utilization ratio (also known as your debt-to-available credit ratio) tells you how much of your total credit limit you’re using across all your credit lines. Typically, you want to keep this number below 30 percent to stay in good standing, but FICO goes a step further and recommends using less than 10 percent of your available credit.
Opening new card accounts or increasing your credit limit can lower this ratio and help build credit, but it’s not enough: Paying off outstanding balances also improves your credit utilization ratio, which can boost your credit score.
The length of your credit history refers to the average age of your credit accounts. The longer you have your accounts open, the better, so you should avoid closing old accounts to avoid your credit standing worsening. In some cases, canceling a credit card account is the right move, but as a general rule, it is better to keep old accounts open.
Adding new types of debt to your profile, such as personal or auto loans, can give you a healthier credit mix and potentially boost your credit score. Opening new credit card accounts or other debt is generally beneficial if you can manage the payments.
That being said, don’t apply for multiple new credit sources at once, as it won’t look good in the eyes of credit issuers and could put an unbearable financial strain on you.
If you want to improve your credit score after missing credit card or loan payments, declaring bankruptcy, defaulting on a loan, turning your loan over to a collection agency, or experiencing other major financial problems, know that it can take years to rebuild your credit.
But for most people, this process starts with taking the time to manage your budget and cut back on your expenses so that you can make payments on time consistently every month.
How long will it take for my credit score to improve?
How long it takes to raise your credit score depends on a variety of factors. Your financial habits, what caused your low score in the first place, and your current situation are all major factors, but there’s no exact recipe that will determine your repair timeline.
However, there is some data available from FICO that shows how long it takes to get your score back on track after a financial disaster. The following data provides estimates of recovery time for people with poor to fair credit.
| event | Average Credit Score Recovery Time |
|---|---|
| bankruptcy | 6+ years |
| Home foreclosures | 3 years |
| Missed/default payments | 18 months |
| Mortgage payment late (30-90 days) | 9 months |
| Closing a credit card account | 3 months |
| Maxed out credit card accounts | 3 months |
| Applying for a new credit card | 3 months |
How long will a negative mark remain on my credit report?
Although the three credit reporting agencies (Equifax, Experian, and TransUnion) determine your score, it is up to lenders to contact these agencies to report information about you. This could be as simple as your credit card company reporting if you make your monthly payments on time, increase your debt, or reduce your balance. Any of these actions can have a positive impact on your score, but the reporting process can mean a slight delay in when your score actually changes.
In addition to potential delays over the phone with credit issuers and credit bureaus, certain financial events can remain on your credit history for years. Unfortunately, the more damaging events often stick around the longest, so it’s best to know what actions will take the biggest toll.
| event | Average time on credit report |
|---|---|
| Late payments | 7 years |
| Seizure | 7 years |
| Debt collection | Up to 7 years |
| Chapter 13 Bankruptcy | 7 years |
| Chapter 7 Bankruptcy | 10 years |
While this information may seem ominous, there is some good news: recency bias is alive and well in the world of credit scoring. Older items that appear on your report will be weighted less than newer items, even if they still exist.
Top ways to improve your credit score
There are a few things you can do to improve your credit score in the short term.
Improving your credit utilization ratio will probably have the quickest effect. You can accomplish this by paying off debt, increasing your credit limit, or opening new credit accounts. In addition, there are a number of other things you can do to improve your score, including:
- Please pay your credit card bills on time. Paying your bills on time is beneficial for those with no credit history because it gives you a chance to prove yourself by being consistent from the start.
- Remove inaccurate or negative information from your credit report. In many cases, you can dispute the outdated information or dispute an error on your credit report and have the occurrence removed.
- Hold old credit accounts. Keeping your accounts open and extending your credit period will improve your habits and boost your score.
- Become an authorized user. When an account owner adds you as an authorized user on an existing credit card account, you piggyback off someone else’s information and add information to your own credit history — just make sure the account is reported to all three major credit bureaus so the data will show up on your credit report.
- Use a secured credit card. If you have limited credit history or a low credit score, a secured credit card can help you build a responsible spending history and improve your credit score. Secured credit cards require a deposit to obtain a line of credit, and the line of credit is usually equal to the amount of the initial deposit.
- Report rent and utility payments. A history of paying rent and utility bills on time can be a positive thing for your credit. That said, if your landlord or property management company isn’t already reporting your rent payments, you may need to use a different reporting service. For example, you may be able to add these accounts to your credit history with Experian Boost.
- Minimize credit inquiries. Every time you apply for a new credit card, your credit score drops. By researching the credit options that best fit your financial needs, you can avoid causing unnecessary damage to your credit score. Services like CardMatch can help you find pre-approved credit card offers before you apply.
Conclusion
Like many issues in life, now is the perfect time to address a low credit score: making payments on time and carefully assessing your financial needs will put you on the right path toward building strong credit.
Remember, financial recovery takes time, sometimes years. But no matter what dilemma you find yourself in, a proactive approach is the best way to approach financial recovery. In the long run, your credit score will thank you.
