How Long Does It Take To Repair Your Own Credit?

When you want to do business or borrow money, your credit report gets considered by most service providers and lenders. If you have a bad credit score, it negatively affects your dealings. However, when in such a situation, you can take measures to improve it. Read on to learn how long it will take to repair your credit so that you can learn to make things better in the future.

How Long Does It Take To Repair Your Credit?

The duration to rebuild credit varies from one person to the other depending on what led to the poor score. It will take months to repair if the low credit score is due to identity theft or errors. On the other hand, it could take a long time due to missed or late payments.

Whatever the situation is, it is good to find ways to fix your credit score to avoid disappointments. A bad credit score means you will not get better financial terms or even get denied loans or get them at high rates. Maintaining a good credit score enables you to get better mortgage terms, better insurance rates, and loans with low-interest rates. 

Duration of Correcting Errors in a Credit Report

Sometimes a low credit score could be due to an error, so you should check first. There could be inaccurate information, identity theft, or your name getting confused with someone else’s. If you file a dispute after identifying an error, the credit bureau will investigate, and it will take 30 days.

You will get notified of a time extension if there is a need for more time, which takes 15 days. After five days, you get notified of the results, and corrections get done immediately in case of an inaccurate report. However, if it was a case of identity theft where a lot of your information got involved, you may have to follow up with a dispute with additional supporting documents or legal action, which will take some time.

What If You Opt For Credit Repair Services?

You can repair your credit report by yourself or hire a credit repair service to do so. The companies take one step to dispute errors if you have not done so yourself. Another way is by removing correct negative information.

Some creditors can get rid of negative information if you have a temporary problem or a sign of goodwill for a long-term client. The creditors can do so if you agree to pay a portion or all of the debt you owe, and in turn, they will remove the negative remarks from your credit report. It can take up to six months to repair the credit, and the score will gradually improve if the creditor has positive remarks.

How Long It Will Take To Rebuild the Credit

When your credit report has negative items on it that, no matter the steps you took, could not get removed, then you will have to rebuild the credit over time. You can start by paying your debts on time and avoid opening multiple new accounts. It can take up to seven years for negative items to be on your credit report.

Fortunately, if you work towards improving your recent activities, the credit score can improve as negative items can lessen with time instead of waiting for so many years.

Steps You Can Take To Start Rebuilding Your Credit

Use Credit Cards Well

Getting rid of credit cards may not be a solution to repairing a bad credit score, as closing the accounts can hurt the score. However, you can start by explaining your financial situation to the lenders. They may help by allowing you to put the account in deferral or offer you their forbearance or hardship plans if they have any.

Know Where You Stand

You will need to have a regular review of your credit score first before embarking on the journey of rebuilding it. You can get weekly reports though you can do it monthly as it takes 30-45 days for the information to get updated. The credit report shows any past missed payments that can last up to seven years. You can repair the report by ensuring that you make on-time and regular payments.

Have a Budget

Budgeting is crucial as it helps you see how your cash flows and make a plan of how things will work out. You can plan for how to settle your bills and how to make full or on-time payments so you can repair your credit. Reaching your financial goals calls for discipline on your part, and one of the effective ways to start is by having a budget.

Nishisingh

Nishi Singh is a professional journalist and editor in New Delhi. She has studied Mass Communication from National Institute of Mass Communication.