How Long Does it Take to Improve a Credit Score?

Credit scores are a necessary evil in life, as they keep you in check with your banking habits. When you are fair on your payments, your bank sees it as a good thing – which adds points to your credit score. However, when you aren’t, the bank takes those points, resulting in a low credit score.

This is bad because the lower your credit score is, the higher the chances will be that your request for a loan will get rejected. If it does get approved, it will happen at a high interest rate. At that point, when your credit score is making you look bad, you should consider fixing it – but how long does it take to improve a credit score? This article should shed some light on that matter.

When to Improve Your Credit Score

You should always strive to improve your credit score, even though it might still look quite good for you. However, your “good credit score” might pale as compared to someone else’s excellent credit score. There are different levels of good credit scores, just as there are different levels of bad credit scores.

Most lending companies decide whether to offer someone a loan by looking at their FICO score. Credit scores typically go from 300 to 850 – so depending on where you are, your score will receive a “label.” Here is where every rating falls in:

• 300-579 – Poor Credit Score
• 58—669 – Fair Credit Score
• 670-739 – Good Credit Score
• 740-799 – Very Good Credit Score
• 800-850 – Exceptional Credit Score

Obviously, when you reach the “poor” range, you need to start fixing your credit score – otherwise, you might not be given loans anymore. However, when you should improve your credit score depends entirely on you. Ideally, an “exceptional” score is what everyone should set as their goal. However, in most circumstances, you may want to begin taking measures when it goes below “fair.”

Things that Affect Credit Score Improvement

Certain aspects may influence just how fast you’ll be able to improve your credit score over time. When you plan on taking your credit score on an “improvement streak,” here is what you will have to keep in mind.

Where Your Score Is Presently

Obviously, if you begin improving your credit score when you are at the “fair” stage, it will take less time to make it “good” or better. The lower you are on the poor-exceptional scale, the more “good behavior points” you will have to earn.

Your Monthly Habits

If you tend to spend a lot of money using your credit card, it might show badly on your credit report. Every effort you make to improve the credit state will be negated by your shopping habits. This can be even more affected if you have the habit of maxing out your credit card. At this point, while fixing your credit score, you might want to take the opportunity and save some money.

What “Improvement” Means to You

Most people simply want their credit score to be “good.” After all, you aren’t likely to be refused a loan with that score. Still, other people want nothing less than “exceptional,” which is the highest credit score. The higher you want to be, the more it will take you to improve your credit score.

How Long Does It Take to Improve Your Credit After…?

Certain circumstances might determine the impact of your credit score and how long it will take for you to get it back on track. One thing that you should know is that every action you take will affect your credit in some way – the differentiating factor here being how you approach the matter.

Applying for Credit

Yes, when you apply for a credit or a loan, you will also slightly affect your credit score. However, in this case, the impact is minor – and within a short period, you should be able to get your credit score back on track. As long as you make every payment on time and there is nothing else that could affect your credit score, you should get your credit back in peak shape within the next three months.

Closing an Account

When you close a credit account – for example, a line of credit that you have been using for quite some time – your credit will be affected. The credit score impact will be minor here, as it does not take as many points from your credit score. Indeed, it will take slightly more as compared to when you just open an account, but the average recovery time here is around 3 months.

Maxing Out a Credit Card

Sometimes, you might get carried away and max out your credit card. The impact that this action has on your credit score is moderate, but under normal circumstances, it may still be fixed within 3-5 months. Make sure that you make the payments back to your credit card on time so that your credit score does not go even lower.

Missing Payments or Defaulting

When you continuously miss credit card payments or default on a loan, your credit takes quite a significant hit. At this point, 3 months will no longer be enough for your credit to recover. That being said, as long as you make your payments on time and no longer do anything that could negatively impact your credit score, you should be able to fix it in about 18 months.

Going Bankrupt

This is likely one of the worst things that can happen to your credit score. Late payments may be “fixed” in about 3 months, but declaring bankruptcy will leave a major impact on your credit. In most cases, it might take up to 7 years – or even up to 10 – until you get your credit score back to normal.

Ways to Improve Your Credit Score

Improving your credit score might take some time and effort. However, as long as you stick to your plan, you should be able to fix or improve your credit score in the shortest time. Here are some steps you may take:

Make timely credit card payments. This is particularly good for those that don’t have a credit history and have a starting credit score, putting you in a better light.

Hold onto your old credit accounts. While it’s ok to close a debit account, a credit one that will improve your credit length might help out your score in the long run.

Get a new loan. It might sound counter-productive, but if you take a new loan and you make the payments on time, these credit-builder loans can fix your credit score.

Remove any incorrect information from your reports. Most of the time, your bad credit is simply the result of an error.

Avoid applying for new credit. Indeed, while this might increase your credit limit, it can also lead to hard inquiries – something that can negatively impact your credit score.

As long as you pay your dues on time, under most circumstances, you should gradually be able to build up your credit score to its former glory. As you are working to gather points, make sure to check your credit report as often as possible. As of April 20, 2020, and until April 2021, you may now check your credit report every week.

Final Thoughts

Improving your credit score might take some time, so it pays to be patient. As long as you keep your eyes on the prize and you take the necessary steps, you should be able to reach the finish line.

Frank Gogol

I’m a firm believer that information is the key to financial freedom. On the Stilt Blog, I write about the complex topics — like finance, immigration, and technology — to help immigrants make the most of their lives in the U.S. Our content and brand have been featured in Forbes, TechCrunch, VentureBeat, and more.

See author's posts