Struggling with poor or bad credit and wondering how long does it take to rebuild credit? Read on.

Good credit is a lot like trust — it takes years to build but can fall apart in minutes.

But, having a bad or poor credit ranking isn’t the end of the world. If you’re simply willing to work hard to improve your credit, then you’ve already started. Now, you’re probably wondering how long it takes to rebuild your credit. The true answer is “it varies,” but we’re here to help you find your ETUGC (estimated time until good credit).

What Impacts Your Credit History?

There are many different factors in determining your credit worthiness (i.e. how risky it is to give you a loan). When deciding if they want to approve your loan or credit card application, lenders are especially interested in:

  • Whether or not you’ve made past payments on time.
  • How much you paid off each time — do you make minimum payments, pay the entire amount or pay some amount in between?
  • Your number of open lines of credit — credit cards, mortgages, student loans, etc.
  • Your Credit Utilization Ratio (your amount borrowed over your available credit) — for example, if you have $10,000 in available credit and you have an ongoing balance of $8,500, then you’re using 85% of your credit! Limit yourself to utilizing no more than 30% of your available credit each month.

Find The Problems

If you (or your partner) have a bad or poor credit ranking, don’t despair — there might be a couple areas you can improve. One way to pinpoint an area where you’re struggling is to request a free copy of your credit report and look for red flags that could use improvement. For instance, if you have several lines of credit open, consider focusing on paying off your cards with the highest interest rates. This will lower your credit utilization ratio, which will help to improve your credit score.

Meanwhile, continue making minimum payments on your other cards that have lower interest in order to build up a history of on-time payments, which plays a major role in determining your credit score.

Get a Secured Credit Card

Once you’ve discovered what your problem areas are, the next step is to actively rebuild your credit. One of the best ways to rebuild credit is by acquiring a secured credit card. With a secured credit card, you’re less likely to have your application rejected (which also dings your credit score), and you’re guaranteed to have money available. Some do require security deposits upfront, which can range from a couple hundred dollars to a couple thousand dollars. And, although most of these cards charge an annual fee, they are definitely worth researching.

Think of a secured card as training wheels on a bike: once you’re able to maintain stability on your own — financial stability, in this case — you can remove those “training wheels” (the “secured” aspect of the card) and get an unsecured credit card that doesn’t require a deposit upfront.

So, How Long Will it Take?

If you have a bad or poor credit ranking, it might take several months to a year before you’re back in “fair” or “good” territory. The pace of rebuilding your credit depends on how much you’re willing to do in order to achieve better credit. This means embracing more frugal habits (such as using coupons and cutting back on those non-necessity items), paying more attention to your payment schedules (downloading Joy for your smartphone could be helpful) and using cash more often to avoid racking up large balances on your credit cards.

If you follow the above steps — in addition to taking out a secured credit card and using it responsibly — you could see improvements on your credit report in as little as a couple months. It won’t be easy, but ultimately you’ll find that the benefits of rebuilding your credit greatly outweigh the downsides.

16 Responses to How Long Does It Take to Rebuild Credit?

  1. John says:

    I love the fact that in 2008 the big banks after giving out troubled mortgages left and right and nearly collapsed our economy went to the US treasury for a bail out. The big banks were ultimately bailed out by the taxpayers. Yet when a taxpayer dies something as miss a payment were scorned for years? Where’s our second chance? Where’s our bail out?? The same banks that asked us for help laugh in our face when we ask for help!

    • tina says:

      You are absolutely right. These banks are heartless. They make billions profit every year. Do they still need bailout?

    • Jason says:

      i would like to point out that you are correct that the USA bailed the banks out, but the banks also paid back every dime, plus interest. The USA made hundreds of millions of dollars off of the bailout. So it did work and it was a successful stimulus bill.

  2. Nancy Fonseca says:

    I need help with my credit I’ve been on top but then got greedy with two credit cards and now I have sink my self having bad credit and been rejected on renting a place. Please help me.

    • Tahani says:

      I have the same problem too. I need a help. How to pay my cridet and if I do how long it’s going to take because I need a place to live in. Help.

  3. Nanette says:

    Please be very wary of any attorney or credit repair company that tells you they can get your interest lowered or the debt completely removed. I had good credit and very stupidly did this very thing. All they accomplished was having my credit accounts written off and destroying my credit.

  4. Missy says:

    Both my husband and I have poor credit. My credit score is 585 and my husbands is 625. My husband had a work related injury back in 2014 which ended up requiring major back surgery in 2015. He has been on Workers Compensation but they have failed to pay him on time and several penalties against them for failing to pay on time. Because of inconsistent payment we have fallen behind on our bills and due to our poor management of credit. We will be receiving a settlement soon which we plan on paying all of our credit cards and after doing so will leave us with a little over $20,000 in the bank. My question is this by paying all of our debt off will that improve our credit rating? If yes how long does that generally take and what can we expect on how much we can see it improve?

    • Mike says:

      That depends. From what i’ve been told when you fall behind with your creditors call and explain your situation and whatever you agree upon get it in WRITING before you make the payment, once paid you’ve given away any leverage you had. If they are willing to bring your accounts current etc with a full payment again get it in writing First and foremost intact they can easily fax you the agreement if they want to expedite the agreement. Lastly if they’ve already reported it to the greedy 3 credit bureau’s then they can if they chose to amend your report not likely but they can if they chose. If they won’t then your payment is only going too stop the bleeding, but the damage will already be done.

    • Chloe says:

      I can never find a legitimate answer to tjis question. But i can share my story. We were recently able to pay off all but one debt that we settled for a lower sum. We then got a three secure credit cards. That we make sure we use 10% or less on and fully pay off every month (this eliminates any interest so do your research on what cards do and don’t work like that). We have each improved our credit scores 100 points in 3 months. Huge jumps the first 2 months, and 6-8 points in the third. Hope this helps a bit.

    • Lisa Hardy says:

      Pay all bills off ASAP. Second, but something nice with a little of the cash, make it something you both have hoped to get for a long time , example: build a garage on to your home. Build a storm shelter. Anyway, you need to be able to look back and be proud of what you purchased. Third, open up a new savings account, or buy a CD( cash deposit certificate). Watch it grow with interest & be very proud of the 3 things you’ve changed financially in your lives. I know bc I been there and done it, good luck! Lisa Hardy,Alabama.

  5. Lusa says:

    I’ve always heard to never negotiate a settlement for your debt as it will reflect badly on your credit report. You also will never be able to open up an account with that company in the future. It’s better to pay off the full amount, if at all possible.

    • Brigette says:

      Im not sure how true this is back in 2008 I had a charge off from capital one. I settled the account for less in 2009. I applied for their quicksilver card and got approved. So maybe its not that it was settled but how much time has passed since it defaulted.

  6. casino games says:

    The other day, while I was at work, my sister stole my iPad and tested to see if it can survive a forty foot drop, just so she can be a youtube sensation. My apple ipad is now broken and she has 83 views. I know this is completely off topic but I had to share it with someone!

  7. Tony says:

    Hello i made a mistake of not paying a credit card today and i left the country. Now i am back and i need to rebuild my credit where do i start. Who do i talk to?

  8. Dorothy says:

    I jusrltvwant to apply for a loan .

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