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How long does it take to raise your credit score?

Man excited about content on tablet screen | pan_kung/Shutterstock.com
Man excited about content on tablet screen | pan_kung/Shutterstock.com


How quickly you can raise your credit score depends on why your score is the number that it is. If your score is low simply because you don't have much credit history (perhaps you've never used credit), you can raise your score within months.

If you have lots of debt, you can raise your score faster if you pay down that debt. If you've damaged your creditworthiness by missing payments or by going through bankruptcy, it will take longer to raise your score. Completely recovering to your all-time high score can take years.

It depends on the reason

Your credit score is formulated using a blend of five factors in the following order of importance: payment history, amount of debt, length of credit, new credit and credit mix. Each of these factors can raise or lower your score.

For example, if you have a low score because you've never had credit before, your score will go up each month as you make credit card charges and pay your monthly bills on time.

As you add cards and don't use them, or put only small charges on them, the amount of debt you have compared to the amount of credit you have available shrinks, raising your score.

Paying down balances also improves your debt-to-credit ratio and raises your score. Adding an installment loan, which is a loan that requires a regular monthly payment -- such as an auto loan -- changes your credit mix and can raise your score.

If your credit score is low because you've missed one or more credit card or loan payments, declared bankruptcy, defaulted on a loan, had a loan turned over to a collection agency, had your wages garnished, negotiated your debt down or used a loan consolidation service that negotiated debt reductions with your lenders, it can take years to rebuild your credit.

Even in this latter situation, you can start raising your score if you can get credit and make timely payments.

Some issues affecting the timing

Your score can change each time one of your lenders reports information about you to the credit bureaus. This can include your credit card companies reporting that you made your monthly payment on time, increased your debt or decreased your balances.

Your car, student and home equity loan lenders also report your monthly payments as does your mortgage lender. These reports can raise your score each month. If you are very close to moving from one score range to another, these monthly changes can help.

If you've missed payments, had a bankruptcy, or experienced other financial problems, it can take years to recover to your previous top score or score range. This is because certain derogatory items stay on your credit report for up to seven years.

According to VantageScore Solutions, the impact of a derogatory item on your credit score decreases with time. For example, a missed mortgage payment can lower your credit score by 50 percent, but your score can recover within 1.5 years if you manage your credit well during that time period.

Score ranges

What's more important to lenders than your exact score is the scoring range in which you fall. Credit scores from the two major scoring companies, FICO and VantageScore Solutions, range from 300 to 850. Their ranges include ratings from poor to excellent.

READ MORE: What is a good FICO score?

Quickest ways to raise your score

The quickest ways to raise your score include paying down debt and improving your debt-to-credit ratio, also known as your credit utilization. Opening a new credit card without paying down any debt can improve your credit utilization. Applying for a card can lower your score, but generally only by a few points.

Another way to raise your score quickly is to start making your payments on time. This will raise a score faster for a person with little credit history and no credit problems than it will for someone with a major credit problem.

Another way to quickly raise your score is to remove incorrect, negative information on your credit reports. You can get free copies of your three reports once each year by going to AnnualCreditReport.com and requesting them, or by going to the websites of the three main credit-reporting agencies, TransUnion, Equifax and Experian.

If you find negative information, follow the directions on the credit report for challenging the information and getting it removed.

FREE: Get your credit score every month from myBankrate.

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