How long does credit repair take?
credit can affect every aspect of your life. Bad credit means higher
interest rates for mortgages, car loans, credit cards and installment
loans. Bad credit can also cost you a job. Federal law permits prospective
and current employers to see a customized version of your credit
report for employment purposes, including hiring and promoting.
Insurance companies are also using credit reports to determine insurance
rates. Repairing your credit doesn't have to take a long time. It's
really a combination of disputing the derogatory credit items and
establishing new and good credit.
The first step in repairing your credit yourself is to obtain a copy of your credit report. You are entitled you to one free credit report every 12 months from Experian, Equifax, and TransUnion. To obtain a copy of your credit report, simply go to AnnualCreditReport.com or call 1-877-322-8228. The credit agencies are not required to provide you with your credit score. You're also entitled to a free credit report if you've been turned down for credit because of something on your credit report.
Undoubtedly one of the quickest ways to see an improvement in
your credit scores is removing negative, inaccurate information
off of your credit reports. The
Fair Credit Report Act
requires the credit bureaus to respond and resolve a dispute within
30 days, a few exceptions can extend the time period to 45 days.
If the error shows up on all three credit reports, dispute the error
with all three credit agencies. One credit bureau is not going to
correct the mistake with the other bureaus.
The amount of time it takes to repair a credit report depends on the number of derogative credit accounts and establishing new on time credit.
According to a Federal Trade Commission report on credit report
accuracy, found that 79% of people who disputed a credit report
error, had that error removed. The credit agencies cannot report
obsolete negative information. In most cases, the credit agency
may not report negative information that is more than seven years
old, or bankruptcies that are more than 10 years old.
How long does it take to repair credit?
It can take a while for the bad credit "to age off". Negative credit can remain on your credit report:
- Bankruptcies: 10 years from the filing date; 7 years for Chapter 13 cases
- Charge-Offs: 7 years from the date the account was charged off
- Collection Accounts: 7 years and 180 days from the date of delinquency on the original debt
- Foreclosures: 7 years
- Judgments: If the judgment has been paid, 7 years. If unpaid, potentially longer
- Late Payments: 7 years from the late payment date
- Repossessions: 7 years
- Short Sales: 7 years
- Tax Liens: 7 years after they are paid
Speak to each creditor and explain to the creditor that you want
to improve your credit file and want to reach an agreement with
the creditor. You might be surprised to hear that the creditor may
offer you acceptable terms to resolve the delinquency. The creditor
may accept partial payment or give you easy terms. Any agreement
should be in writing and after completing the arrangement, the creditor
will remove any derogative information on your credit report.
The credit repair process may only take 3-6 months before you see improvement in your credit score.