How Long Does It Take to Rebuild Credit?


If you’re trying to rebound from a major financial nosedive, it may seem like you’ll never get your credit back on track. Maybe you’re overwhelmed by credit card debt, or you lost your job and got behind on all kinds of bills.


No matter what has happened in your past, there is always something you can do to take control of your finances and your credit. It might take some time, but it is possible. So just how long does it take to rebuild your credit? Read on to find out.

How long does it take to rebuild your credit history?

Your credit score reflects the information on your credit report, so you have to take into account what items are listed, how much impact they have, and how long they stay on there.

The maximum amount of time for a negative item to stay on your credit report is 10 years. This is typically reserved for Chapter 7 bankruptcies and unpaid tax liens. Most other derogatory items, such as delinquencies, charge offs, and foreclosures, remain there for seven years.

If these items are accurate and all of the proper protocol was followed by creditors, it can be difficult to get them removed from your credit report ahead of schedule. However, it’s important to know that their effects on your credit score lessen over time, despite still being listed on your report.

How can you find the problem areas on your credit report?

Before even thinking about rebuilding your credit, you have to figure out exactly what’s wrong with it. Start off by ordering your credit report for free from each of the three credit bureaus.

Once you have them, carefully review each one to see what information is reported there. Lenders don’t just look at your credit score. They also look at your credit reports to see what is contributing to your credit score.

You’ll potentially see a list of credit items listing negative items. For example, you might see a late payment listed here, including how far past due it was. You’ll also see a list of your accounts in good standing, and a list of credit inquiries made over the last two years.

Assuming everything you see is accurate, you’ll have a good sense of what items you need to work on, either through actions you can take today, or simply by waiting.

How to Start Rebuilding Your Credit

Once you know what type of credit you’re working with, you can take a few different steps to start rebuilding. Some items take a while to make a difference in your credit score, while others start to have an impact right away.

Either way, all of these tips are necessary in order to maintain healthy credit even if some major items simply need time to repair themselves.

Pay Your Bills on Time

Maybe you’re living paycheck to paycheck, or maybe you just don’t pay attention to due dates. No matter what your attitude is towards paying bills, it’s time to shift your mindset and pay them on time.

Being just 30 days late on a payment can cause your credit score to drop more than 100 points. And the real kicker? The higher your credit score is, to begin with, the more points you’ll lose. So if your credit score is already in the high 700s or even the 800s, it’ll drop on the higher end of the range for any infraction.

Bottom line: take care of those bills each and every month. Sign up for automatic bill pay that comes out right on payday if you have to. Also, note that this rule doesn’t just apply to credit cards and loans.

Just about any creditor can report a late payment to the credit bureaus, even your cell phone carrier or utility company. So get out the calendar and make a plan to pay each and every bill before it comes due.

Keep Your Debt Low

Owing a large amount of debt can hurt your credit in a variety of ways. There’s an entire category devoted just to your amounts owed, accounting for nearly a third of your credit score. And there are several different ways in which your debt level is analyzed for your credit score.

First, it’s important what kind of debt you have. Revolving debt like credit cards is not looked upon favorably because the debt is unsecured. There is no physical property that a lender could seize if you stop paying your balance. Plus, there’s no potential for any type of growth in value.

Whatever you purchased with your credit card probably won’t garner more money than you paid for it, and probably not even face value at that.

Installment loans, on the other hand, are scored better because they usually have an asset tied to them (like a mortgage or car loan.) They potentially offer some type of added value, like equity in your home.

Credit Utilization Ratio

Another reason to keep your debt low is that your credit score takes into account your credit utilization ratio. This refers to the amount of credit you have access to compared to the amount you actually use.

It’s ok to have a couple of credit cards, and the higher your credit limits are, the better it is for your credit. But the more you charge (and don’t pay off), the more that credit limit shrinks.

Ideally, you don’t want to use any more than 30% of your credit. So if your credit card limits total $10,000 and you only have a $2,000 balance, then you’re only utilizing 20% of your credit limit.

To quickly rebuild your credit, try to pay down any debt you have to get your ratio under 30%. You should notice an uptick in your credit score after a month or two.

Think Twice Before Opening New Accounts

You might think that getting a credit card is a great way to increase your credit utilization ratio without having to actually pay down debt. Just get a new card to increase your limit, right?

Not so fast. Your credit report is an intertwined web of information and making one seemingly simple change can have ripple effects you didn’t account for.

There are several ways that opening a new account could actually cause harm to your credit. For starters, you’re increasing the amount of revolving credit in your credit mix. That’s not going to help your credit score at all.

Credit Inquiries

Inquiries also hurt your credit score. Sure, it’s just five or ten points, but that can add up if you’re applying for several cards at once. Plus, each of those inquiries remains on your report for two years!

Finally, new accounts shorten your average length of credit because you’re essentially adding a big fat zero that brings down your more seasoned accounts.

It’s fine to get a new credit card if you need one for a specific reason, but don’t open one solely in an attempt to rebuild credit. You’ll probably end up doing more damage in the long run.

Don’t Close Old Accounts

On the same token, closing an old account could hurt your credit by inadvertently lowering your credit utilization ratio. Closed accounts do still contribute to your credit history length for another ten years, but they won’t count towards your available line of credit.

If you’re considering closing an account because you can’t control your spending, try locking up your cards or keeping them with a trustworthy family member.

You’ll also need to delete any saved credit card information on your phone and laptop so you’re not tempted to make quick-click purchases. Obviously keeping your debt on track is most important. However, if self-control isn’t an issue, then you’re probably better off keeping your current accounts open.

What factors affect your credit scores?

Although there are five separate categories, they actually overlap in a number of ways. Here’s how they break down:

  • Payment History (35%)
  • Amounts Owed (30%)
  • Length of Credit History (15%)
  • Credit Mix (10%)
  • New Credit/Inquiries (10%)

Opening a new credit account, for example, may increase your overall available credit. However, the brand new account also lowers the average length of your credit history and adds a new inquiry on your report.

That’s three different categories affected by one action, with one potentially positive change and two negative ones. Plus, each person’s credit score is weighted differently depending on the entire credit profile.

Bottom Line

Everything is relative. It’s nearly impossible to figure out exactly what effect your financial decisions will have on your credit score.

Rather than trying to manipulate potentially positive impacts, focus on the sure-fire wins like paying your bills and lowering your debts owed. They might take longer to rebuild your credit score, but you don’t run the risk of an unforeseen domino effect by muddled decision-making.

If you need more help, consider contacting a credit repair company. They help clients rebuild the credit by removing negative items from their credit reports. Check out our list of the top credit repair companies.

Lauren Ward
Meet the author

Lauren is a Crediful writer whose aim is to give readers the financial tools they need to reach their own goals in life. She has written on personal finance issues for over six years and holds a Bachelor's degree in Japanese from Georgetown University.