Few things in life impact your financial health more than your credit score. Even someone with a great job and plenty of money in the bank could find themselves denied for a loan or a lease application if they have a poor credit score. This raises an important question. How long will it take to improve your credit score?
The quick answer is that your credit scores start to improve as soon as you start engaging in positive credit activities. For example, if you pay your bills on time and have a low credit utilization rate, your credit should start to improve within one to three months. However, the time it takes to recover from a credit drop will vary from case to case.
Consider a drop in your credit as you would a broken bone. Recovery time will depend on how you broke it and on how well you take care of yourself after the accident. So, how can you estimate the time it will take to improve your credit score?
Credit recovery times depend on your credit history
This sounds like a lame cop-out answer, but the time it takes to improve your credit back to where it was depends on your credit history.
There are three things you should consider:
- What did you do to damage your credit?
- How many times did you do it?
- And what was your credit score before you got into trouble?
Recovery times depend on what you did to damage your credit score
To illustrate, let’s say you are late on a mortgage payment. This is a serious issue when it comes to your credit score, but you can recover from it in as little as nine months. File for bankruptcy, on the other hand, and it could take 5 to 10 years to recover.
The table below provides an idea of the time it will take to recover from a variety of scenarios, ranked from most to least seriousness.
|Action||Average time to recover|
|Missed Payment / Default||18 months|
|Maxing Out a Credit Card||3 months|
|Closing an Account||3 months|
|Applying for Credit||3 months|
How often you make a credit faux pas is also important. Although the first missed payment has the biggest impact on your credit score, missing additional payments will continue to lower your credit score and make it harder to recover.
Your credit score will experience the biggest drop the month after a negative credit action. After that, the impact will diminish every month that passes. Most negative credit events have little impact on your credit score after 3 years.
It also depends on how good your credit score was to start with
Your current credit score is another major factor. The better your credit score, the longer it will take to recover. It’s a case of “the higher you climb, the bigger the fall.”
This is because a lower credit score already shows someone has shown a pattern of missed payments. Adding one more missed payment is not as significant as it would be on someone who has a clean credit report.
Remember the 9-month estimate for recovering from a missed mortgage payment? That only applies to people with a fair to good credit score of ~680. Fixing the damage will take much longer — up to 7 years — if your credit is excellent (780 and above). As you can see, the better your credit score, the more critical it is to protect it.
The table below gives some estimates on the time it takes to recover from negative credit actions depending on your initial credit score.
|Negative Credit Action||780 Credit Score||720 Credit Score||680 Credit Score|
|Bankruptcy||up to 10 years||7 to 10 years||5 years|
|Foreclosure||7 years||7 years||3 years|
|Collections||7 years||7 years||3 years|
|Short Sale||7 years||7 years||3 years|
|Late Mortgage Payment||up to 7 years||3 years||9 months|
These tables are based on data provided by VantageScore and FICO. However, they are just rough guesstimates. Answering the question of “how long does it take to improve your credit score” is difficult because there are so many moving parts to consider.
What we can determine more accurately is the impact credit actions will have on your credit score.
What impact do negative credit actions have on your credit score?
The most common events that impact a person’s credit score are listed below. Notice how the impact on your credit score depends on the same three factors we discussed above: what happened, how many times it happened, and your initial credit score. Although we used data from VantageScore to compile this table, the impact on a FICO score is comparable.
Prime (660 to 740)
Subprime (550 to 660)
|Credit card missed payment (30 days late)||-70 to -90||-35 to -50|
|Credit card missed payment (60 days late)||-80 to -100||-40 to -55|
|Car loan missed payment (30 days)||-65 to -85||-40 to -60|
|Car loan missed payment (60 days)||-80 to -100||-40 to -70|
|Mortgage missed payment (30 days)||-85 to -105||-20 to -40|
|Mortgage missed payment (60 days)||-100 to -120||-30 to -50|
|Charge-off||-90 to -130||-45 to -65|
|Foreclosure||-105 to -125||-35 to -65|
|External collections||-100 to -150||-50 to -80|
|Bankruptcy||-200||-100 or more|
What can you do to start improving your credit score?
Unfortunately, improving your credit score is typically a waiting game. You probably won’t see significant changes until after three to six months. The one exception is if you find there are major mistakes in your credit report and successfully dispute them. Maybe a lender reported a charge-off by error or someone stole your identity and a bunch of credit card accounts are not yours. Fixing errors like these will usually take a few months, but once the negative items are removed from your report your score should improve immediately.
Now we have set realistic expectations on how long it will take to see significant improvements, what can you do to start improving your credit score? Here are seven steps you can take today to start improving your credit score.
7 things you can do to improve your credit score today
- Read your credit report line by line and dispute every error you find.
- Pay your bills on time. Late payments stay on your report for 7 years.
- Pay off your credit card balances. This will reduce your credit utilization ratio and your scores will rise.
- Pay off any collection accounts on your report. Some scores, such as VantageScore and FICO 9 don’t take into account collection accounts if they have been paid.
- Stop applying for credit. Hard inquiries hurt your credit but they stop impacting it after 12 months.
- Pay off your credit card debt with a consolidation loan. This will reduce your credit utilization ratio, which will do wonders for your credit score.
- Ask a relative or friend who has good credit habits to add you as an authorized user on their credit card. As long as the payments are made on time, your credit score will improve.
The bottom line
Most of us have broken an arm or leg and lived to tell the story to others. The pain from the break goes away in time, but some breaks take longer to heal. How long will it take to increase your credit score following a financial injury? Your credit score will start to improve within one to three months after positive credit actions, such as paying your bills on time or reducing your credit card balances. However, the time to complete recovery will vary dramatically depending on your credit history. The tables above give some broad estimates based on common credit profiles.
Andrew is the managing editor for SuperMoney and a certified personal finance counselor. He loves to geek out on financial data and translate it into actionable insights everyone can understand. His work is often cited by major publications and institutions, such as Forbes, U.S. News, Fox Business, SFGate, Realtor, Deloitte, and Business Insider.