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Lenders use your credit report and credit score to help them determine how much to lend you, and at what interest rate. That credit report is derived from your credit history — an algorithm of your past credit usage (including how much credit you have, how well you pay it off, and what mix of credit you have access to, among other things).
Since your credit report and credit score are ultimately derived from your credit history, then the question you should be asking is, “How long will it take to achieve better credit?” Or put another way, “How much new history do I need to build in order to achieve a healthier credit report, which will be reflected in my credit score?”
The answer is not a simple one, although I will attempt to give you some guidelines.
The speed of your credit improvement depends on the information that’s in your credit report. For example:
Ultimately, credit scores rise when you do the following:
That’s it — it’s surprisingly simple. The problem is, people don’t always have the diligence to stick with the work involved for #1 and #2, and they don’t have the patience to wait for #2 and #3. But the truth is: It takes work and patience, and the longer you apply both of those two things, the better your credit will be.
You can start to see your credit report increase fairly quickly. If you start with a very low credit score, it could take a while, perhaps even a couple of years, to see your credit improve. That makes it difficult for people to make positive changes because it can seem so easy to extend your bad credit habits for one or two more days. It’s hard to maintain good credit habits for months when you may not see immediate results.
But the results will come! You should start to see results in just a few months (especially if there were errors), and within a year of perfect credit habits, you will likely see a dramatic improvement … and within a couple of years, you can have stellar credit. At the time it might seem like it will take forever, but you will look back at the end and realize that it went quickly and was totally worth it!
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April 11, 2023
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