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How Long Does it Take to Rebuild Credit?

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 throughout 2023. The information in your credit report tends to update every 30-45 days, depending on 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.

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

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 at least the minimum amount due on revolving accounts. Paying at least the minimum can help you avoid late payments and keep your accounts in good standing.

As you think about your bills, consider whether you need to allocate more of your budget to them. TransUnion Consumer Pulse research in Q1 2022 found that 34% of consumers expect their bills and loans — expenses like housing, utilities, insurance and credit cards — to increase in the next three months.

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. Our Pulse research found that concerns about inflation and rising interest rates have led around a quarter of consumers to save some extra money for emergencies in the last three months. If you can save a little bit from each paycheck, you can help protect your budget from being derailed by a broken furnace or unexpected car repair.

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 check my credit report once per month” 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 720 and 780.

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.

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:

The credit scores provided are based on the VantageScore® 3.0 model.  Lenders use a variety of credit scores and are likely to use a credit score different from VantageScore® 3.0 to assess your creditworthiness.

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