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How Long Does Credit Repair Take?
By cassidy MONEY RESEARCH COLLECTIVE
It’s no secret that a good credit score is the key to locking in lower interest rates on loans and credit cards, while a low score can make it difficult to qualify for credit at all. But what if your score is already low? How long does credit repair take to fix it?
In this post, we’ll give you an overview of how long it takes to repair your credit, plus tips on how to speed things up. So if your credit score is holding you back, read on!
Table of contents
- Credit repair process
- Can you speed up the credit repair process?
- How long does credit repair take FAQs
- Summary of our guide to how long does credit repair take
Credit repair process
While you might be able to see some small wins in as little as 30 days, it could take one year (or even several years) to fix your credit and see significant improvements.
This is because the length of time it takes to repair your credit depends on several factors, including your credit history, the severity of the damage, and how much free time you have to dedicate to improving it.
For instance:
- If your credit score took a dip because you recently applied for a bunch of new credit, you may see it bounce back after a few on-time payments.
- If it’s low because of errors or incomplete information, it could take as little as 30 days to get those removed by the credit bureaus and see your score start to improve.
- If your credit score is low because you just filed for bankruptcy, it could take up to 10 years to completely turn it around.
With that in mind, here’s how to start the credit repair process:
Get your credit report
The first step is to grab a copy of your credit report from all three major credit reporting agencies: TransUnion, Experian, and Equifax. You’re typically entitled to one free report from each agency every year. But thanks to the CARES Act, you can currently get one free copy a week.
You can request your report online at www.annualcreditreport.com. You’ll need to provide your name, address, Social Security number, and date of birth to verify your identity.
Review your credit report
The next step is to carefully review each credit report to look for errors or signs of identity theft. For instance, you’ll want to flag any:
- Incorrect personal information: If your name, address, Social Security number, or date of birth is incorrect, it could be a sign of identity theft.
- Incorrect account information: This could include accounts that don’t belong to you, inaccurate credit limits, charge-offs, or settled collection accounts still showing as active.
- Duplicate accounts: If you see the same account listed more than once, it’s probably an error.
- Inaccurate payment history: If you see late payments that you know you made on time, make a note of it.
- Inaccurate balances: If you’ve recently paid off any credit card debt, student loans, or personal loans, make sure those loans are listed as closed on your report.
- Accurate items that are now outdated: This could include bankruptcies more than 10 years old, late payments more than seven years old, and soft or hard inquiries more than two years old.
Dispute with credit bureaus
If your credit history includes negative but accurate information, such as reports of bankruptcy or foreclosure, there’s not much you can do to remove it from your report. However, if anything on your report is inaccurate or outdated, disputing the item with the credit bureau can help you improve your score.
You dispute an error by contacting the credit bureau online, by phone, or by mail. Here’s the contact info for each bureau:
| Disputing Method | Experian | Equifax | TransUnion |
|---|---|---|---|
| Online | https://www.experian.com/disputes/main.html | https://www.equifax.com/personal/credit-report-services/credit-dispute/ | https://www.transunion.com/credit-disputes/dispute-your-credit |
| Phone | (888) 397-3742 | (800) 864-2978 | (800) 916-8800 |
Experian P.O. Box 4500 Allen, TX 75013 | Equifax Information Services LLC P.O. Box 740256 Atlanta, GA 30374 | TransUnion LLC Consumer Dispute Center P.O. Box 2000, Chester, PA 19016 |
In some cases, you may be asked to send a written dispute letter that explains which item you’re disputing and why. If you’re not sure how to draft a dispute letter, use this sample letter from the Federal Trade Commission. You can also hire a credit repair service to help you.
NOTE: The Fair Credit Reporting Act (FCRA) gives credit bureaus 30 days to investigate a dispute from the time it’s received. In some instances, it may have 45 days to investigate, such as when you dispute an error after requesting your free annual credit report or when you’re asked to submit additional information. Once the bureaus reach a decision, they have five days to notify you.
Negotiate with lenders and creditors
Another important part of the credit repair process is negotiating with creditors and lenders. This step is especially helpful if you’re struggling to stay on top of your debt payments.
For example, say you haven’t paid your credit card bill in a while and it’s at risk of going to collections. Your credit card issuer may be willing to accept a smaller settlement or lump sum payment as a way to recoup some of their losses and close your case.
However, it’s important to remember that lenders aren’t obligated to agree to any proposals you offer. You should be prepared to walk away from the negotiation if necessary. But with a little patience and perseverance, it’s often possible to reach an agreement that will help improve your credit score – or at least mitigate the damage caused by late payments.
Can you speed up the credit repair process?
Repairing your credit usually isn’t easy, especially if you’ve been dealing with damaged credit for a long time. However, there are steps you can take to build credit fast and speed up the process.
- Enlist the help of a credit repair service. The best credit repair companies specialize in helping consumers improve their credit scores by taking on some of the more time-consuming tasks, such as contacting creditors and disputing errors on your credit report. While there’s no guarantee it will result in a higher credit score, it can be a helpful option if you’re short on time or need help navigating the credit repair process.
WARNING: Under the Credit Repair Organizations Act (CROA), no credit repair agency can promise you results. So be wary of any companies making false claims or guarantees about improving your credit score. - Apply for a secured credit card. A secured credit card is a type of credit card that requires a security deposit. This deposit is usually the same amount as your credit limit. This type of card can be helpful if you’re trying to rebuild your credit history.
- Look into a credit-builder loan. As the name implies, a credit-builder loan is a type of loan specifically designed to help you build credit. It works like this: You take out a credit builder loan at a bank or credit union and agree to make regular payments over a set time period. As you make payments, the bank reports them to the credit bureaus. Once you’ve repaid the loan in full, you receive the money you originally paid, plus interest, in a savings account.
- Pay your bills on time. Payment history is the most important factor in credit scores, so get in the habit of making your payments on time, every time.
- Keep your credit utilization ratio low. Credit utilization is the amount of debt you have compared to your credit limit. A ratio of 30% is ideal. So, if you have a $1,000 limit on your credit card, try to keep your balance below $300.
How long does credit repair take FAQs
How long does it take to fix a credit score of 500?
It depends on two factors: why your credit score is 500 and the new score you're trying to achieve. For instance, Person A might not think their score is "fixed" until it's pushing 800, while Person B might consider it fixed at 620.
So for your personal situation, start by identifying the factors that are causing your low credit score. It could be because of mounting debt, errors, late payments, or other factors. Once you've identified the "why" behind your 500 credit score, then you can work on building it up.
Lastly, set a target credit score. Is it 620? 700? This can also help you create a more accurate timeline for how long it'll take to fix a credit score of 500.
Can you repair your credit in 3 months?
It's possible to repair your credit in as little as three months, especially if inaccurate negative marks are what's bringing your score down. However, it will likely take longer if you have a history of late payments or have experienced a significant event like foreclosure or bankruptcy.
How long does it take to clear a bad credit history?
It takes time to repair bad credit. While you may be able to make small improvements in as little as a few months, it can take several years of consistently good habits to see your credit score improve by hundreds of points.
The good news is that bad marks fall off your credit report over time. For instance, bankruptcies fall off after 10 years, late payments fall off after seven years, and so on. So if you're patient and willing to put in the work, you'll see your credit score clear up and improve over time.
How long does it take to fix credit with a bankruptcy?
A bankruptcy can stay on your credit report for up to 10 years, but that doesn't mean your credit is ruined for that entire time. In fact, there are several things you can do to rebuild credit as soon as your bankruptcy is discharged.
For instance, you can continue to make all of your non-bankruptcy payments on time, keep your credit utilization low, and consider applying for a credit builder loan if you qualify.
You can also look into credit counseling or credit monitoring services to help you improve your credit score. Just be sure to research any companies you're considering carefully before you sign up for their services.
Summary of our guide to how long does credit repair take
A bad credit score can make it tough to get a loan, rent an apartment, or even get a job. But don’t worry – credit repair is possible, and it doesn’t have to take forever.
To start the credit repair process:
- Request your free credit reports from annualcreditreport.com.
- Review them carefully.
- Dispute any inaccurate negative items either online, by phone, or by mail.
- Negotiate better terms with lenders if your debts are difficult to manage.
- Practice good credit habits.
And as always, consider researching credit repair companies if you don’t have the time or expertise to go through the credit repair process yourself.
