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How Long Does it Take to Rebuild Credit?

It can be disheartening to see your credit score drop after a financial setback. Whether you missed mortgage payments, made the hard choice to file for bankruptcy or faced something else entirely, these kinds of disruptions can result in a hit to your credit.

But with a plan, adhering to healthy financial habits and a dose of patience, you can rebuild your credit. By improving your overall financial picture, your credit will follow over time.

There’s no one answer to how long it takes to rebuild credit. The time varies from person to person. Someone with several missed payments over the past two years could expect it to take a while for their score to improve. However, someone with a few missed payments six years ago could see a faster improvement, provided their payment history since then has been excellent.

While there’s no definitive answer, many agree that the best time to start is now. Here are six tips for how to get started rebuilding your credit:

1. Review your credit report

Before you can rebuild your credit, you need to know where you stand. That’s why regularly reviewing your credit report is essential. You can get a free copy of your credit report weekly through April 20, 2022. The information in your credit report tends to update every 30-45 days, depending the lender, so you may not need to check it every week.

If you’ve missed payments in the past, you’ll see those noted on your credit report. These details can stay on your report for up to seven years. However, by making regular, on-time payments, you can make sure the account is in good standing after the missed payments fall off your report. An account in good standing with longevity (meaning you’ve had it for a number of years) can help contribute to a higher score.

A bankruptcy can stay on your report for up to 10 years from the date the bankruptcy was filed. With both bankruptcy and missed payments, after the allotted period of time, the records will automatically fall off your report.

Although not as impactful to your credit score as a missed payment or bankruptcy, hard inquiries, which appear on your report when you apply for new credit, will stay on your credit report for up to two years. Having a plan when you shop for new credit and not applying for credit you don’t need can help you keep forward momentum with your credit score.

After requesting your credit report, be sure to carefully review the information within it. If you believe there is an inaccuracy in your credit report, you can file a dispute. This is easy to do through TransUnion’s online dispute process or our call center, which are fast and free.

2. Make a plan for your money

As you rebuild your finances, you’ll want to have a budget. It provides much-needed visibility into your cash flow so you can build a plan that works for you. Be sure your plan allows you to pay all your bills in full. Making on-time, in-full payments is one of the most simple and effective ways to rebuild your credit.

If you have extra money left over in your budget after paying your bills and other necessities, try to save a bit from each paycheck. Saving is a top priority for many people in the wake of the COVID-19 pandemic. TransUnion Consumer Pulse research found that a third of consumers say it’s a lot more important to have savings today, compared to how they felt before the pandemic.

3. Set realistic goals

As you rebuild your credit, setting attainable goals will allow you to track your progress — and celebrate your success along the way.

For example, you may set a goal of saving a small chunk of change in case of emergencies. If you can save a little bit from each paycheck, you can help protect your budget from being derailed by a broken furnace or unanticipated medical bill. In our Pulse study, 79% of U.S. consumers said that having savings for unexpected events is very or extremely important.

Aim to set both short- and long-term goals that are realistic and measurable.

Instead of, “I want a better score” and “I need enough money in savings,” think instead of something like, “I will raise my TransUnion credit score 40 points by next May” and “I’ll have $500 in my emergency fund by December.” This can help provide clarity and discipline to you in your financial journey.

You might set a goal of improving your credit score to a specific level. For context, a good credit score with TransUnion, which is based on the VantageScore 3.0 model, is between 661 and 720. For help with both setting and achieving your goal, you may want to try CreditCompass, which TransUnion created in partnership with VantageScore. CreditCompass gives you tailored recommendations for actions you can take to improve your credit score over time, based on the paths millions of people have taken in their own credit journeys.

4. Manage your credit cards wisely

It may seem counterintuitive, but a credit card can be an important tool in rebuilding your credit. Getting rid of your credit cards isn’t always the answer to a bad credit score. In fact, closing down accounts may hurt your score.

If you’re unable to make your credit card payments, reach out to your lenders to explain your situation. You can find their contact information on your credit report or most recent bill. You may ask whether they offer hardship or forbearance plans, or allow you to place your account in deferral. When an account is deferred or in forbearance, you’re allowed to temporarily stop making payments on the account.

If you’re wondering how a hardship or forbearance plan may affect your credit, consider asking your lender how they will report your account to the credit reporting agencies.

5. Improve your credit utilization rate

As you think about how you’re using your credit cards, keep your credit utilization rate in mind. This is a calculation that shows how much credit you’re using compared to what you have available.

For example, if you have $20,000 in available credit, and you’re using $10,000 of it, your credit utilization rate would be 50%. Generally, you want to keep your credit utilization rate at 30% or less, with the lower it is, the better.

If you’re able to significantly lower your utilization rate, you may see it reflected the next time your lender reports the updated information to TransUnion (typically within 30-45 days). That could lead to an improvement in your score.

6. Do frequent financial checkups

Once you’ve created your budget, set your goals and committed to your plan, you’re well on your way. But be sure to keep tabs on your progress as time goes by. You may find that certain aspects of your budget don’t work the way you’d imagined. Or perhaps your financial situation has changed, whether you’ve taken on new expenses or are earning a little extra income.

Whatever it is, take time to adjust your budget to meet your current reality. By keeping close to your goals and continuing to track your progress, you can monitor how you’re progressing—and pat yourself on the back as you make strides.

Rebuilding credit is a worthwhile journey

Remember: The path to a healthy financial future is a marathon, not a sprint. Be patient with yourself in this journey. There may be setbacks along the way, but if you stick with your plan and prioritize good habits, you’ll be able to reach your credit and financial goals.


Ready to learn more? Check out this post about how credit scoring works.

Disclaimer: The information posted to this blog was accurate at the time it was initially published. We do not guarantee the accuracy or completeness of the information provided. The information contained in the TransUnion blog is provided for educational purposes only and does not constitute legal or financial advice. You should consult your own attorney or financial adviser regarding your particular situation. For complete details of any product mentioned, visit This site is governed by the TransUnion Interactive privacy policy located here.

What You Need to Know:

There are various types of credit scores, and lenders use a variety of different types of credit scores to make lending decisions. The credit score you receive is based on the VantageScore 3.0 model and may not be the credit score model used by your lender.

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