how long does it take to reestablish a good credit history and score?
I have a bad credit score and right now I am in the process of repaying my debts. Pretty soon I will be finished with school and looking to purchase a car and maybe even an apartment. I wanted to know how long would I have to wait.
Public Comments
- It all depends. I am in the same boat. I have about 9K left to pay off, and my credit score is hovering right arond 600, up from the 524 it used to be about a year and a half ago. If you still have accounts open, treat them well and keep them open. Pay them on time. For the accounts that are delinquent, in collections or listed as a chargeoff, pay them as soon as you can. If creditors are calling you to have you try to settle the debt, ask them to settle for a lower amount. They will try not to do this, but they will eventually settle. Keep telling them that you don't have any money, and x amount is the only thing you can afford to pay (but be prepared to make this payment that day). Also know that they will likely not settle for anything lower than 50 or 60% on the dollar, though it does happen in certain situations. The longer you've had the debt, the lower they will go, especially if it's a high amount- say several thousand dollars. In the meantime, keep credit inquiries to a minimum, as that's bad too... Good luck!
- Unfortunately it can take up to seven years to wipe your history clean, and you need to be without incidences during that time. It's a frustrating uphill battle at times but definitely worth it. Be sure to keep an eye on your credit reports (you can get them for free once a year, and pay to see your score and reports more than once) and you can call credit companies if you need to dispute anything. I've been there and it's been a long haul. Hang in there.
- While it will take 7-years and 180-days for your derogatory accounts to drop off your credit report, good credit can be re-established in 24-months buy many ways. You can use credit cards for every day things, never exceed 30% of your credit limit and pay in full before the due date which is what most people do or buy furniture, take out a personal loan or buy a car. Credit scores are 90% based on the last 24-months of activity.
