How Long Does It Really Take to Repair Bad Credit History?
Posted By: Carlie McKeon | March 7, 2014 | 0 Comment(s)
Credit repair is not a difficult procedure. However, it does take time to establish a better credit rating. The main reason that credit repair takes a significant length of time is because the most important factor in determining your score is payment of debt owing, especially payment of your bills. Credit bureaus examine when you paid your bills, and they take note of any late or missed payments. And, of course, if that debt was sent to a collection agency, doing a credit repair is going to be considerably more difficult.
Paying On Time Doesn’t Enhance Credit Repair
Even if you’re fastidious about making payments on checking and savings accounts, student loans, or prepaid cards, these actions don’t (in and of themselves) improve your rating. These payments don’t go a long way to affecting positive change to your rating when you’re enacting credit repair on your financial state. If, however, you neglect to make payments and debt is passed on to a collection agency, this will end up being harmful. So it’s a good idea to make a budget and payment plan to deal with outstanding debt. Pay at least the minimum balance and start to set aside funds to put directly against both the interest and prime amount of your debt.
Paying for Your Cell Phone Can Improve Your Credit Rating
As odd as this may seem, making on-time payments on telecommunication accounts such as cell phones or Internet service can actually improve your rating and help with your credit repair plan. Depending on the country
you’re in, the credit repair benefit of paying cell phone bills on time may require you to use a secured credit card.
Credit Repair Can Start With Getting More Credit
While it may seem counterintuitive, applying for another credit card can improve your score and get the credit repair process started. If you’re not in a position to get unsecured approval, consider a secured card. They are easier to obtain because the bank is not assuming a considerable risk. Another solution may be to ask a family member with excellent credit to add you to their account. Much like co-signing for a loan, this can also help credit repair initiatives.
Credit Repair Plans Take Time – Start Now
A bankruptcy declaration and protection can wipe the slate clean and remove all the blots on your credit rating. While this may not be your preferred way to repair your credit, it may be one of the only solutions. The problem is, it can take up to seven years to establish your credit history again. A credit repair plan can do its job in less time than bankruptcy protection. With proper planning you can improve your score within three to four years. The top areas that are examined by credit assessors are: payment history, debt owing, and length of time in arrears. Time is the major component. So the sooner you start repairing your credit, the better.
Though it may take years, consider the benefits of doing a credit repair. Also consider the length of time it took you to get into your present financial position. You may find that the way out is shorter than the way in.