Key takeaways
- Your credit score is based on a formula that takes five different contributing factors into account
- The time it takes to raise your credit score depends upon the reason(s) that your score is lower in the first place
- The longer your accounts are open and in good standing, the better it will reflect on your credit score
- There are several things you can do to raise your credit score, starting with making all payments on time
How fast can you raise your credit score? That’s a question you may find yourself asking, especially if you’re looking to make a big purchase or qualify for a more exclusive credit card. While there is no one-size-fits-all answer, there are things you can do to help get your credit score more in line with where you want it to be.
To break it down, the time it’ll take to raise your credit score depends on the reason your score needs boosting in the first place. If your score is low because you don’t have much credit history or you’re just starting your credit-building journey, you may be able to boost your score within months.
It may take a little more time if your score is low from the amount of debt you have, but finding the right debt relief option can help you get on the right track.
If you’ve hurt your creditworthiness through missed payments or going through bankruptcy, making your way back to a healthy credit score will take even more patience. In certain cases, a full recovery can take years.
Think of your credit report as a history of your past relationships with credit. If you consistently made late payments (or missed payments), for example, those derogatory marks are likely to stay on your report for a long time. Let’s take a closer look at how long different derogatory marks stay on your credit report, how long it takes to raise your credit score and some of the top steps you can take to improve your credit score.
Raising your score depends on your starting point
Your credit score isn’t just a judgment call; it’s determined through a formula that considers five primary factors. Listed in order of importance, each of the following factors can raise or lower your credit score:
- Payment history (35 percent)
- Credit utilization (30 percent)
- Length of credit history (15 percent)
- Credit mix (10 percent)
- New credit (10 percent)
Given that a history of consistent on-time payments is the most influential factor, being new to credit cards makes it easier to raise your credit profile. Every month you pay your cards on time will bump up your credit score, so set a routine, and you’ll likely be able to grow your creditworthiness quickly — as long as you can avoid missing a credit card payment.
Your credit utilization ratio (also referred to as your debt-to-available-credit ratio) is how much of your total credit limit you use across all of your lines of credit. Typically, you want to keep this figure between 10 and 30 percent to stay in good standing. Opening up new card accounts or getting a credit limit increase can help build credit by decreasing this ratio, but that isn’t all it takes. Paying off your outstanding balances also improves your credit utilization, thus improving your credit score.
The length of credit history refers to the average age of your credit accounts. The longer the account has been open, the better, so you may want to avoid closing an old account to keep yourself out of poor credit standing. There are cases where canceling a credit card account is the right move, but as a general rule, you’ll benefit from keeping old ones open.
Adding new types of debt into your profile such as personal loans or auto loans will give you a healthier credit mix and potentially raise your credit score. If you can manage the payments, opening new credit card accounts and other debt is generally beneficial. That being said, don’t apply for multiple new credit sources all at once — it doesn’t look good in the eyes of credit issuers, and it may become too much of a financial burden to bear.
If you want to boost your credit score after missing credit card or loan payments, declaring bankruptcy, defaulting on a loan, having a loan turned over to a collection agency or experiencing any other major financial issues, know that it can take years to rebuild your credit. But in nearly all cases, the process begins with the hard work of managing your budget and cutting back on spending so that you can make consistent, timely payments every month.
How long does it take for your credit score to go up?
The length of time it takes to raise your credit score depends on a combination of factors. Your financial habits, the initial cause of your low score and where you currently stand are all major ingredients, but there’s no exact recipe that will determine your repair timeline. However, there is data available from FICO that suggests how long it may take to bring your score back to its starting point after a financial mishap. The following data is an estimate of recovery time for people with poor to fair credit.
| Event | Average credit score recovery time |
|---|---|
| Bankruptcy | 6+ years |
| Home foreclosure | 3 years |
| Missed/defaulted payment | 18 months |
| Late mortgage payment (30 to 90 days) | 9 months |
| Closing credit card account | 3 months |
| Maxed credit card account | 3 months |
| Applying for a new credit card | 3 months |
How long do derogatory marks stay on your credit report?
The three credit bureaus (Equifax, Experian and TransUnion) determine your score, but it’s up to your lenders to contact them to report information about you. This can be as simple as your credit card company reporting that you made a monthly payment on time, increased your debt or decreased your balances. Each of these actions has a positive influences on your score, but there may be a slight lag in the timing of when your score will actually change, due to the reporting process.
In addition to a potential delay in the telephone game between your credit issuer and the credit bureaus, certain financial events can linger on your credit history for years. Unfortunately, the more harmful events are often the ones that stick around the longest, so it’s best to know what actions will be the biggest burdens:
| Event | Average time on credit report |
|---|---|
| Late payments | 7 years |
| Foreclosures | 7 years |
| Debt collections | Up to 7 years |
| Chapter 13 bankruptcy | 7 years |
| Chapter 7 bankruptcy | 10 years |
This information may seem ominous, but here’s encouraging news: recency bias is alive and well in the credit scoring world. Even if they’re still present, the old items that appear on your report have less weight than your newer ones.
Top ways to raise your credit score
There are several things you can do in the short-term to try to better your credit score.
Improving your credit utilization will likely have the quickest impact. You can accomplish this action by paying down debt, upping your credit limit or opening a new credit account. Additionally, there are a couple other things you can do to start your journey to an increased score, including the following:
- Make credit card payments on time. This activity is especially helpful for people with no credit history because you have the chance to prove yourself by being consistent right off the bat.
- Remove incorrect or negative information from your credit reports. Oftentimes, you can challenge old information or dispute errors on your credit report to attempt to get the event removed.
- Hold old credit accounts. Keeping accounts open that improve your length of credit will help your score as you better your habits.
- Become an authorized user. When an account holder adds you to an existing credit card account as an authorized user, you are adding information to your own credit history by piggybacking on someone else’s. However, make sure the account reports to all three major credit bureaus to ensure the data is showing up on your credit report.
- Use a secured credit card. When you have a limited credit history or a low credit score, a secured credit card can help you build up your credit score by generating a history of responsible use. Secured credit cards require a deposit in order to obtain a line of credit, and the line of credit is usually equal to the amount of the initial deposit.
- Report rent and utility payments. A history of on-time rent and utility payments can really benefit your credit, but you may need to use an alternative reporting service if your landlord or property management company isn’t already reporting your rent payments. For example, you can use Experian Boost to add these accounts to your credit history.
- Minimize credit inquiries. Every time you apply for a new credit card, your credit score takes a hit. You can avoid any unnecessary dings to your credit by researching credit options best for your financial needs. You may even consider using a service such as CardMatch™ to check out pre-qualified credit card offers.
The bottom line
As it is with many of life’s problems, there’s no better time to address the issue of a low credit score than now. By making on-time payments and carefully assessing your financial needs, you will be on the right track toward building strong credit.
Keep in mind that the path to financial recovery takes time, sometimes even years. But regardless of the dilemma you may find yourself in, a proactive approach is the best way to tackle financial recovery. Your credit score will thank you in the long run.
