The question of how long it takes to rebuild credit has to be one of the most common questions I get asked.
I’m not alone either, as I see it asked in forums and across the internet.
Trouble is, there’s no simple answer as it all depends on your current situation, your past credit situation and what you’re doing about it.
There’s no one credit rebuilding schedule to suit everyone but I can provide a little insight into how it all works.
The time involved in rebuilding credit
Let’s get the bad news out of the way first so we can move onto more positive territory.
It takes time to rebuild your credit.
Whatever sensationalist headlines or random blogs may tell you, there is no ‘quick’ way to rebuild credit.
There are ways to accelerate the process and lots you can do to optimize it, but it’s gradual and happens over time.
Why? Because creditors like credit card companies and banks report on a schedule, usually every month.
They report your activity to the credit reference agencies (Experian, Equifax and TransUnion) each month and the agency updates your credit report.
As you can appreciate, there’s only so much you can do in a month to pay down debt, reduce credit utilisation and so on, so it all takes time.
If you were fortunate enough to be able to pay off a credit card, you wouldn’t see it until the next reporting period.
Once reported, you should see a small increase in your credit score that next month.
If paying off that card took you under the magic 30% credit utilisation figure, you might see a larger jump.
That’s why it’s a gradual process and not a one-hit wonder.
Rebuilding your credit
The good news is that you can begin that gradual increase in your credit score right away.
Every positive move you make to rebuild credit will help increase your score by a few points.
Follow my guide on rebuilding credit, make sure your rent or mortgage is reported to the credit reference agencies, make sure you’re on the voting register and always pay on time.
All those things can help you rebuild credit. Over time.
There is no quick fix unfortunately.
Your credit score can be decimated in days but can take months or even years to rebuild.
The positive of this is that there is lots you can do to help rebuild credit. Most of those things will also increase your quality of life too so it’s a win win!
