It can be so frustrating: trying to repair bad credit, especially after the recent economic downturn. Credit card companies changing the rules on borrowers so that credit scores have been impacted across the board. Hikes in interest rates to ridiculous levels has also meant it’s that much harder to pay the monthly bill, and millions of people are falling behind. Add to this the major job loss around the country, and Americans who lived on credit are finding that suddenly they are unable to pay their bills.
When you need or want to buy, however, we’ve learned to buy with credit, so repairing credit becomes a major concern, so that you can qualify again for more credit to buy more stuff. Yet there are no shortcuts to credit repair. The only way to make it happen is to pay down debt, pay on time, and wait for the months it will take for your credit score to improve.
When you have a lot of debt, and are near your credit limits, you can improve your credit score by paying down the balances. You might even consolidate some cards, by moving balances over to lower rates cards, and closing one or two. Paying down balances takes thirty or sixty days to be reflected on your account, and show up in your credit score. But unless you lower your balances to under 50% of the total credit line, you won’t see a major impact, maybe a few points. If you can lower your balances to below 50% of the credit limit, then you can raise your score higher.
Having too much credit available can also hurt your score. Try to close a couple accounts. Closing all of your credit will make your score go down, but try to limit your cards to just a few. This change can also help your score in a few months.
Fix items on your credit report that are incorrect. If there are collections on your credit report for example, that shouldn’t be there, or other errors, these can be fixed fairly quickly, as Federal law requires that the creditor respond within thirty days. The credit reporting agency will make the changes quickly as well, so sixty days is not unusual for these improvements to show up on your credit report.
If you’re wondering how long does it take for credit to clear without a bankruptcy, it’s not unusual to see credit improvements in just a few months, after you start paying on time, and bring your balances down somewhat. However, if you continue to pay late, you will have a lower credit score. Even if you pay on time for two years, just one thirty day late payment will impact your score negatively all over again. You have to get in the habit of paying everything on time, for at least several months to a year, and two years is better. Use this time to practice not using credit for purchases, but building a new habit of paying cash. pay down your credit, get used to using cash, and soon you’ll find you have high credit scores once more.
