If you have abad credit score, you may feel like a red tick is following you everywhere.Trying to improve your credit score is a useful goal because the better your credit score, the lesser theinterest rate you will have to pay on all your loans such as mortgages, auto loans, and credit cards. But how long do you have to wait to see the changes?
There is nodefinitive answer to this because everyone's financial situation is unique andcomplex. In general, it can take anywhere from a month to 10 years, depending on where you started and how you manage your finances.
What factors affect how long it takes to improve yourcredit score?
The time ittakes to establish your credit score depends on several factors:
The length of time you have the loan. If you're just starting out, it may be easier to improve yourcredit score by, for example, opening a credit card and paying responsibly.These things can have a greater impact if you are new to credit than if you have a more precise credit profile. Apply For home improvement loans.
Your current credit score.If you restore your credit after a decline, it will take longer to get yourhigh credit score back to its former glory than if you started with a lower credit.
Any kind of negative and it’s impact. Not all negative reviews are created equal. A 30 day late paymentwill not affect your creditworthiness the same way a 90 day late payment will.Bankruptcy or foreclosure can also have a very negative impact on your creditworthiness.
The best way to improve your credit score
The mostimportant thing you can do to improve your credit score is to make all paymentson time. Keeping your balance below the total limit - especially with a credit card is anotherimportant thing you can do to improve your credit score. Together, these two factors - payment history and credit usage - make up 65% of your score.
An easy way toavoid late payments is to sign up for automatic payment of all bills. Trackingmultiple accounts manually at different times each month can be difficult. Automatic payments can eliminate that friction and you don't have to worry about late payments. Make sure your bank account has enough funds to pay for all automatic payments. Otherwise, it will count as a negative review which you want to avoid in the first place.
Bottom line
Building astrong credit score doesn't happen overnight. It also doesn't correct credit scoresfor errors. There are several proactive steps you can take to improve your overall credit profile. But in the end, a combination of timing and on-time payment patterns is the best tool for improving your credit score.
