How Long Does It Really Take To Improve Your Credit?

?? – introduction: I recently looked through last year’s check registers for confirmation of a payment I had made when I noticed my multi-page handwriting seemed strange. It took me a while to figure out why: at the time my right hand was in plaster and I was writing with my left.

I remembered how exhausting this month had been. Pretty much everything I did was harder and time consuming, and I just couldn’t wait for the day until I removed my cast. Over time, my hand healed. And although it had happened a year ago, it now seemed like a distant memory.

Time can also help heal your credit. The mistakes you have made or the financial problems you have encountered can be excruciatingly painful right now. They can feel devouring. You may be frustrated, angry, or just plain exhausted. And you may feel like you’ll never have good credit again. But eventually, those memories can also fade.

Here are three ways that time can help you heal your credit.

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After a while, negative information can no longer be reported. Typically this period is around seven years with the following caveats:

  • Collection accounts or write-offs can be reported for seven years plus 180 days from the original date of default (usually the date you failed to make your payment to the original creditor, which has resulting in the cancellation and / or sending of the account for collection).
  • Paid tax liens can be declared for seven years from the date of payment.
  • Judgments can be reported for seven years or until the statute of limitations expires, whichever is longer.
  • Bankruptcies can be reported for 10 years, although credit bureaus remove the Chapter 13 seven years after the filing date.
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    As long as the dates listed for the negative items on your credit reports are correct, you probably won’t have to do anything to make them go away. They will be automatically deleted, and once they are, it will be as if they don’t exist. They can no longer impact your credit scores.

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    No matter how annoying it can be to see negative information every time you get your credit reports, keep in mind that this information often has less of an impact on your credit scores over time.

    In fact, VantageScore analyzed the numbers to help illustrate the impact, over time, of various actions on credit reports. For example, a missed payment could result in a 50% drop in your VantageScore credit score, but it could recover in about a year and a half. (However, the impact will not be the same for everyone. It will depend on the content of their credit reports. Often times, a person with a higher credit score will see a larger drop when negative information appears on their reports. , compared to someone with a higher credit score. lower score.)

    In other words, that credit card payment you missed five years ago may seem bigger than it really is.

    In 2011, FICO published estimates of how long it would take for FICO’s credit scores to recover from mortgage problems and found that “In general, the higher (the) starting score, the longer it takes. time for the score to recover completely “.

    For example, it would take about nine months for a consumer with a starting FICO score of 680 to recover from the impact of a 30-day late mortgage payment, while it would take about 2.5 years for someone. ‘one with a starting FICO score. of 720 to recover. Someone with a FICO score of 780 when they missed that payment could take three years to get back to where they were.

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    The age of your accounts is one of the top five factors that make up your credit rating. Here you get “credit” so to speak, to have experience with credit. This factor takes into account the average age of all your accounts as well as the age of your oldest account. And time is your friend. The longer you have had your accounts, the better your score for this factor.

    There is also a caveat here, however. If all of the information on your report is negative, then when it is no longer reported, you will start over. This is why even if you have gone bankrupt, it may be a good idea to get back (cautiously) back in the saddle and establish a positive credit reference, even if it is with a low limit. secure credit card. Otherwise, when your negative accounts go unreported, you could end up with little to no credit history.

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    How to make time your friend

    Burns says that by providing data on how weather affects credit scores, VantageScore wants to “give people hope that they can get back on their feet within a reasonable time and give them a path to get there.” . So how do you take advantage of Father Time?

  • Know what you are dealing with. Good or bad, you need to know what’s on your credit reports. Get your free annual credit reports at and double check the dates. And get your credit scores for free so you can track your progress over time.
  • Focus on what matters. An old late payment may not have the impact you think it is. Catching up on an account you’ve recently fallen behind on, or even paying off high credit card balances, could have a more positive impact on your scores.
  • Apply for new credit wisely. Remember that new accounts affect the average age of your credit history.
  • Head in the right direction. In the future, set up automatic payment or payment reminders so you don’t miss any payments and see your scores drop again.
  • The opinions expressed in this column are solely those of the author.

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