When you make a big mistake or find yourself in financial trouble, it can feel like the end of the world. Many people feel a lot of guilt and shame when they are faced with the consequences of their financial mistakes, but take heart – negative items on your credit report do not last forever. In fact, they will bear less weight with time, even if they don’t disappear.
Here are some factors that affect how long it will take you to improve your credit score.
Depends on where you start
“The higher you climb, the further you fall,” rings true for your credit score. If your score started really high, like in the 800’s, it will take you more time to get back to that than if your credit score was in the 600’s when it took a hit, simply because there is more ground to make up.
Additionally, if you have a history of late payments or maintain a high credit utilization ratio, it may be more difficult to start fresh than if you have a single negative item you’re worried about. Your credit history is important, and even the amount of time you’ve had accounts open will matter when it comes to your credit score.
Depends on what the negative items were
There are various items that can negatively impact your credit score. Some of which include:
- Opening new credit lines
- Closing accounts
- Maintaining a high balance
- Late or missed payments
But not all of these items are weighed equally. And even if you do have one of the heavier-weighed items, like bankruptcy, on your report, it will become less weighted with time. Although the standard rule is that negative items stay on your report for seven years, they do not maintain their value for the entire time. That means that after a few years, your missed payment or even your bankruptcy will affect your score less and less.
Depends on what you do in the meantime
If you’re dedicated to improving your credit score, there are some helpful steps you can take in the meantime to speed up the process. Some include:
- Use a secured credit card
- These require you to make a deposit, usually of a few hundred dollars, which serves as your line of credit. This makes overspending or incurring debt very difficult, but still appears as payments made on time toward a credit card balance. You can increase your limit over time by paying more toward your deposit. This can be a great tool to build credit until you’re able to qualify for an unsecured credit card.
- Make all payments on time
- Set up auto-pay or reminders to make sure you don’t miss a single payment
- Try to avoid new debt
- Start budgeting and saving for purchases, and exercising self-control to keep your debt to a minimum.
- Check for mistakes
- View your credit report and dispute any incorrect information to make sure your score is accurate.
The most important thing for you to do is be patient. There are no quick fixes, and it definitely takes much more time to repair credit than it does to ruin it. But it is not impossible and not the end of the world, so follow these steps to start the process of repairing your credit.