How long does credit repair take?
Filed under: Debt
We've been getting a lot of desperate comments from people who are seeing their credit destroyed as their personal financial lives take a nose dive. Many are losing jobs and others are facing severe medical problems. Some made big bets with investment property in real estate and now face numerous foreclosures. All are probably facing major drops in their credit scores and not able to get new credit in the tight market today.So how long does it take to fix your score, if your score is down dramatically after a credit disaster? The good news is that your most recent history is what impacts your score the greatest, so as these bad debt reports age you will find your score gradually getting better as long as you pay on time starting from today.
I have seen people with bankruptcies get back up to the high 600s within three years. What does that mean in today's credit market? They would probably be able to get credit, but they will likely not get the best credit offers. In order to get the best interest rates you need a score of 760. The next best rates go to people with scores of 700 to 759. People between 650 and 699 can still get credit but they will pay significantly more for it in higher interest rates. Under 650 you probably will find it very difficult, if not impossible, to get credit.
How long will it take to get a clean credit record? Most of the negatives on your credit report will drop off after seven years, but you don't have to wait that long to see an improvement in your score. If you have a clean record of payments on time for three years and you don't apply for more than one or two new cards at that time your score should go above 650. If you want to get that score above 700, you'll need to get your debt levels closer to 10 to 20 percent. Even if you're good, you probably won't reach 700 for at least four years.
Lita Epstein has written more than 25 books including the "Complete Idiot's Guide to Improving Your Credit Score" and "The 250 Questions You Should Ask to Avoid Foreclosure."
Reader Comments (Page 1 of 1)
11-03-2008 @ 5:39PM
j said...
thanks for the article
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11-03-2008 @ 9:08PM
billb said...
This is what got people in trouble in the first place, they gave loans to people with lower scores at higer interest rates, and they couldn,t pay the morgage at such high rates. If they think you can't make the payment at 6% what makes them think you will at 11%. $225,000 loan at 6% for 30 years is $1,125 a month. $225,000 at 11% for 30 years $2,062. If they think you are a risk $1,124 a month, what makes you can at $2,062 a month.
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11-03-2008 @ 9:09PM
Robb said...
This whole credit thing is a trumpted up profit center for these lending institutions that we, the tax payers are now asked to bail out. I've looked at my credit report, done what was expected to fix all the unnecessary BS that company's are allowed to put in our file and watched while the credit companies did lousy followup and then took the word of some unpaid clerk at a credit source rather than look at my substainaited absolute proof they were wrong and the file should be changed. I ADOPTED A NEW PHILOSOPHY. "LETS GO TO COURT" With one exception of the 7 suites I was actually wrong. They now by law had to fix the file. I then filed suit against the creditor and have collected a total of $12,800.00 on 3 of the cases for the time I spent having to defend myself using my last hourly rate of $125 per hour as my base. You have to keep very accurate records and ABSOLUTELY REFUSE TO SETTLE OUT OF COURT. You want their mistake and their lies on the court record. It was real simple when they bring a gun to a fight I bring a cannon. If your careful you don't need an attorney and can use a paralegal to help you prepare the first set of documents for under $100
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11-05-2008 @ 9:57AM
Daniel said...
We are partners with the banks.
If they want bto get paid, they better work with us instead of tightening the duce ! Don't they get it, they are going out of business and dragging us down with them !
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11-10-2008 @ 12:30PM
MARJORIE said...
The practise that is counter-productive and damaging to consumers credit rating is the fact that every facet of business that you try to do hinges on your Credit Report, Score, or both.Nobody does business that matters unless they check your credit report, inluding when renting an apartment or house. The down-side of this I am told is that queries on your Credit damages your score. This is ridiculous, since this is a standard business practise that the consumer cannot avoid. Consumers must get together and pressure merchants and the department of Consumer Affairs to regulate the damage to one's credit score. Another serious area of concern is that if the consumer has an issue with a merchant that they refuse to resolve then their next option is to place damaging information on your report. This should be stopped since all merchants are not honest in their business practises.
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11-10-2008 @ 12:38PM
Lita Epstein said...
Marjorie,
There are soft inquiries and hard inquiries and they are tracked differently. Soft inquiries do not impact your credit score. Only hard inquiries, which include applications for loans or credit cards, can lower your score. When a vendor checks your score if you apply for a rental or new insurance, that should not negatively impact your score.
If you have been unsuccessful in proving to a creditor that a charge is not legitimate, you do have the right to challenge the record of that charge with the credit reporting agencies. While they do tend to side with the creditors, if you can prove in writing that the charge is not legit, the credit reporting agency must investigate the charge. They do have 60 days to investigate and must temporarily remove the charge from your record. If you do plan to question a charge be sure you send written proof of why that charge is not legit. The stronger your case the better chance the charge will be removed permanently.
Lita
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11-12-2008 @ 12:37PM
David said...
I recently paid off all my credit cards and kept them open. How long does it take for the new credit information to appear on my credit report.
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11-12-2008 @ 12:42PM
Lita Epstein said...
David,
Most credit card companies report to the credit bureaus at the end of your billing cycle. For example, if your billing cycle ended Oct. 31 and your received your bill Nov.6 and paid if off, then the report would be sent just after the next billing cycle ends, which would likely be about Nov. 30. In this scenario, you should see the pay off on your credit reports in December.
Lita
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11-15-2008 @ 8:50PM
Jeanne said...
Does anyone know why a credit card company will reduce your line of credit even if you have made NO late payments??
This was just done to me with two different accounts. They said it was something to do with my credit report but I have checked my scores and they are in the low 700s.
Can anyone advise me?
Thanks,
JP2454@aol.com
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12-03-2008 @ 5:38AM
Credit Repair calls for help! said...
Everyone sometimes need credit repair like me. You know what? It greatly helps me because I’ve spent the majority of my adult life trying to keep up with the Joneses. As an American, there is an undeniable pressure to live the “American Dream”. I just think it’s ironic that the American Dream has become almost identical for everyone—big houses, fancy cars, a white picket fence, and expensive things. It’s pretty evident that all of these luxuries and material goods aren’t making Americans happy. Instead of happiness, I feel guilt and stress when I make purchases at the store. I feel guilty for buying something I know I don’t really need, and I feel stress because I know my credit card bill is going to be huge. I, like many Americans, need to reevaluate what really makes us happy. Focusing on material goods isn’t making me happy. All these things that I have are just weighing me down emotionally and financially. The simple things in life make me happy—like spending time with my kids, getting outdoors, and talking with my husband. The best part is none of those things cost money. So why then are Americans so consumed with spending money on worthless things? Americans are addicted to shopping and spending to impress each other. I’m sure my designer clothing impresses a few people, but if they knew how much credit card debt it took to dress like this, they wouldn’t find it as impressive. Keeping up with the Joneses is overrated, and I’ve paid a heavy price to try to live the “American Dream”. I’m going to start living my own dream—the real American dream. I’m going to start managing my money, saving my money, and paying off my debts. My credit score is also extremely low, so I’m going to get credit repair help. With less debt and credit repair I can focus on the things in my life that truly make me happy—my family. Click to read more on Credit Repair.
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