There is no easy answer to this question.
The length of time it takes to repair credit depends on how frugal and disciplined you are. Getting out of debt and rebuilding credit are intertwined, and you need to work hard at it.
Someone with a credit score of 300-400 can expect it will take months to a year to get back up to 600 or above. And that’s assuming you do everything in your power to repair your credit record as soon as possible.
With that mission in mind, here are the most effective ways to improve your credit score.
Pay off Debts and Pay Bills on Time
Your payment history accounts for 35% of your credit score, and your amount owed counts for 30%. Consistently paying your debts on time and working off your outstanding amounts will have the biggest impact on your credit rating.
Which is not to say that we don’t realize working off debt is difficult. Trust us, we’ve been there. But the reality is that if you want your score to go up, you need to whittle away at those numbers.
The best thing you can do for yourself is to create a monthly budget, use less credit and regularly contribute money to your credit accounts. By creating concrete goals, milestones, and setting spending limits, you will more effectively curb your spending than if you do it without a plan in place.
Once you have a habit of paying your bills on time and your amount owed starts going down, you will see your credit score rise.
Be sure to read our blogs on creating budgets and getting out of debt:
- The Two Best Methods to Get Out of Debt and Why They Work
- Build a Household Budget to Save Money in 6 Steps
- 6 Creative Ways To Make Budgeting Less Boring
- 10 Thrifty Ways to Save Money On Groceries and Still Eat Healthy
Can You Raise Your Credit Score 200 Points in a Month?
It is indeed possible to raise your credit score that quickly, but as we said above, it really depends how hard you work at it.
Along with paying off balances, how much you use your credit is another big factor for your credit score. Credit bureaus like to see that you only are using a small fraction of your total available credit. It, therefore, makes sense to have more credit available overall, while only spending 20-30% of your total each month.
There are ways to boost your overall credit limit without needing to be in good standing.
Be sure to read our blog how to raise your credit score 200 points in 30 days to learn about the benefits of getting a secured credit card or becoming an authorized user of someone else’s credit account.
Try Credit Repair to Improve Your Credit Score
Is your credit score low, but you can’t pinpoint why?
All of the above are very important, but it’s also possible that there are errors on your credit report causing your score to be low. One study suggests that 26% of American adults have at least one error on their credit report.
It is recommended that you go over your credit report with a fine-tooth comb. Everyone is entitled to get a free copy of their credit report once every twelve months.
If you do find errors, there are ways to dispute them. You can dispute errors on your report yourself, or try a credit repair specialist.
It won’t cost you anything to do it yourself, except time and aggravation. Credit repair specialists, on the other hand, do this for a living. They know how to navigate the tricky world of credit bureaus and lenders.
Along with errors, credit repair companies can help you remove the following dents from your credit report:
- Hard Inquiries
- Late Payments
- Charge-Offs
- Collections
- Errors
- Liens
- Inaccurate Items
- Bankruptcies
- Repossessions
- Foreclosures
- Judgments
- Duplicates
To learn more about the benefits of credit repair, read our blog on the subject. If you would like to request a free copy of your credit report and free consultation from one of our credit specialists, contact us today.