ArticleCity.comArticle Categories HOW LONG DOES IT TAKE TO REBUILD CREDIT?


Just how long does it take to rebuild credit?

If you’re asking this question, you’re probably one of the over 50 percent of American consumers who have subprime credit.

There’s also a strong chance you’ve already experienced the painful consequences of having bad credit. Perhaps you faced great difficulty getting approved for loans at your preferred rates, your rental applications were turned down by landlords, or you missed out on a job.

Now you’ve no option but to rebuild your credit, but you want to know how long this will take.


    Our take:Lender focused on poor credit, based out of Chicago currently offering loans in 29 statesAPPLY NOWLender: OppLoansCredit ScoreLoan Size/AmountLoan TermAPROrigination Fee350 – 600$500 – $5,0009 – 2459.00% – 199.00%0.00% – 3.00%

Continue reading for deeper insight.

The Short Answer

If you’re looking for a straightforward answer, here it is:

Rebuilding bad or poor credit can take anywhere from a couple of weeks to several months or even years. It all depends on the nature of your financial mistakes, how low your credit is, and your credit goals.

For instance, if your goal is to have excellent credit, it’s going to take you much longer than if your goal were to achieve good credit.

Keep in mind it’s far easier to build credit when you have none than it is to rebuild bad or poor credit.

The Long Answer

Now that you know the average amount of time it will take you to fix your credit, it’s time to dive into the finer details. What exactly determines how long the repair process takes?


    Our take:Online marketplace that searches through lenders to find the best offer for your personal situationAPPLY NOWCredit ScoreLoan Size/AmountLoan TermAPROrigination FeeAll can apply$100 – $15,0001 – 604.99% – 1,386%Varies by lender

Here’s everything you need to know.

How Low Is Your Score?

FICO scores, which are the most widely used, range from 300-850. When you get your credit report, your score will be any number within these boundaries.

Based on that score, a lender or credit card company will classify your score as anywhere from Very poor to Excellent. While these ranges are lender-dependent, the common ranges are:

  • 300-579 = Very poor credit
  • 570-669 = Bad or fair credit
  • 670 -739 = Good credit
  • 740-799 = Very good credit
  • Over 800 = Excellent or exceptional credit.

It’s essential to note that these boundaries only serve as a guideline. It’s possible that lenders have their own in-house thresholds of poor, bad, good, and excellent credit.

For instance, one lender might consider anything above 740 to be excellent credit, while another might strictly use 800 as the minimum score for excellent credit.

Either way, the reading of your current credit score will play a vital role in determining how long the rebuilding process will take. If your score is, say 350, you’ll have a longer way to go than someone who has a score of 550. Yes, both of you are in the poor category, but one is closer to fair credit.

What Caused Your Credit Score to Fall?

The fact that your goal is to rebuild credit means you once had good or excellent credit. What caused it to fall?

Good or excellent credit scores don’t just fall on their own. There’s usually a major financial mistake that causes a drastic drop, a series of mistakes that cause a gradual decline, or a combination of both.

Regardless of whether your credit ruin was a result of a drastic drop or a gradual decline, the mistakes on your report have a big influence on rebuilding timeframes.

Let’s have a look at common mistakes and what they mean for your rebuilding efforts.

Credit Report Errors

Federal Trade Commission study established that about 25 percent of consumers found an error in their credit report. What’s more, most of the consumers who disputed these errors experienced some modification in their reports, resulting in a jump of between 25 to 100 points.

The most common errors include:

  • Incorrect personal information, such as a wrong name or residential address
  • Accounts that belong to you
  • Closed accounts marked open
  • Inaccurate payment history or account balances
  • Duplicate accounts.

Any of these errors can have a big impact on your credit. For example, if there’s an incorrect name on your report (such as John J. Doe instead of John T. Doe), it’s probable that the bad score on your report belongs to someone else.

If personal information is correct but there’s another error, such an inaccurate payment history, your credit score will also be affected. Bearing in mind that payment history accounts for up to 35 percent of your score, you can imagine how significantly incorrect payment history, especially payments incorrectly reported as late, will have on your credit.

The good bit is you can always dispute credit report errors. The issuing credit bureau will investigate the issue and make appropriate adjustments. Given that error removal can cause a credit score to jump by 100 points or more, it’s possible to go from bad to good credit in a matter of weeks.

Let’s say your current credit is 669 (bad or fair credit). If you were to receive a 100-point jump, your score will reach 769, which is very good credit! With this jump, you will go from not qualifying for a mortgage to qualifying for a mortgage.

So if your credit is in ruin because of errors that you have nothing to do with, you could dispute them and rebuild your credit in a matter of weeks – assuming there’s no financial mistake of your own making on the report.

High Credit Utilization

Having good credit means you can be approved for multiple credit cards with high limits.

Unfortunately, this can be a financial trap that ruins your credit. When you have high credit utilization (more than 30 percent of your credit limit), your credit score will fall.

To illustrate, if you have three cards with a combined limit of $3,000 and you consistently spend more $900 every billing cycle, you have a high credit utilization rate. This could be a sign of financial pressure or irresponsibility.

The good news is it’s easy to fix your credit utilization. Just spend less than 30 percent of your credit limit and your score will improve fairly quickly.

Loans in Default or Collections

Most people end up with bad or poor credit because they default on their loans. If you stop servicing your loans, they’ll go into collections.

This will show up on your credit report. What’s more, collection accounts will stay on your report for seven years. Even if you pay them off a few months after defaulting, the information won’t drop out of the report until seven years lapse.

But here’s the thing. You shouldn’t give up on rebuilding your credit score just because seven years is a long time. If you invest in rebuilding efforts, your credit score will improve gradually, and then quickly once the collection account drops out of your report.

Repossessions and Foreclosures

If you default on an auto loan, the lender can repossess the vehicle. And if you default on a mortgage, the lender can initiate foreclosure proceedings.

Although these processes can be lengthy and require court-issued warrants, millions of Americans still lose their assets this way. Like collection accounts, repossessions and foreclosures will stay on your credit report for seven years. Anyone who accesses your report after these events will be able to see that you’ve undergone a repo or foreclosure.

Collection accounts, repossessions, and foreclosures have big impacts on credit scores. You could lose up to 200 points, which is enough to take your credit from good to poor.

It can take several years, usually more than seven, to recover these points.


From 2005 to 2017, about 12.8 million people in the U.S. filed for bankruptcy, and it’s easy to see why.

When what you owe is greater than the value of your assets, filing for bankruptcy is an ideal way to get some temporary protection from your creditors. Some of your debts could also be discharged.

However, bankruptcy has a major impact on your credit. For starters, a Chapter 7 bankruptcy will stay on your report for seven years while a Chapter 8 bankruptcy will stay on your report for 10 years.

Although you might have filed for bankruptcy because of circumstances beyond your control, such as high medical bills, there’s no doubt a bankruptcy will leave your credit in ruins. Your credit score can plummet 200 points or more.

That said, rebuilding your credit should begin soon after your bankruptcy. As you work out repayment plans with your creditors, keep taking other measures to improve your credit. Progress will be slow, but eventually your score will climb to your desired level, especially after the bankruptcy drops out of your credit report.

How Long Does It Take to Rebuild Credit? There’s No Clear Timeline

If you’re asking “how long does it take to rebuild credit?” you’re probably looking for a straightforward answer.

We’d love to give you a specific period of time, but, in truth, there’s no clear timeline. Depending on the nature of your credit issues, it could be anywhere from a couple of weeks to several years. But with this guide, you now have a clear understanding of what to expect.

At Bonsai Finance, we’re are with you as you embark on your credit rebuilding journey. Our helpful personal finance blog offers helpful tips and hacks that will make the rebuilding task ahead of you easier.

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