Rebuilding credit is a long-term process that requires commitment and dedication. It can take anywhere from a few months to several years to repair your credit, depending on the severity of the damage and the steps you take to improve it. To get a credit score from scratch, you need to use credit, such as opening and using a credit card or paying off a loan. It will take about six months of credit activity to establish sufficient history to obtain a FICO credit score, which is used in 90% of credit decisions.
FICO credit scores range from 300 to 850, and a score above 700 is considered a good credit score. Scores above 800 are considered excellent. On average, it takes 12 to 18 months of responsible use of credit to go from a bad rating of around 500 to a fair rating (in the range of 580 to 669). Once you've reached the good credit zone (670-739), don't expect your score to continue increasing steadily.
If your score is low because you don't have much credit history, or you're just starting your credit-building process, your score can improve in a matter of months. Keeping balances low relative to your total limits, especially for credit cards, is another crucial thing you can do to improve your credit rating. You can also opt for rental credit reporting services, such as RentTrack and PayYourRent, that will process the rent payment and report it to the credit bureaus (paying a fee, if the landlord is not registered). At first, you should only have one secured credit card to recover your credit, although you may want to eventually consider having two.
Every month that you make a timely payment by credit card and you have no balance on your insured card, your credit score should increase. A few months of responsible credit card use will help rebuild your credit, and 12 to 18 months may be enough to turn a bad rating into a good or excellent one. If you have hired representation, your credit repair company should be able to give you an idea of how long it should take in your situation. Working to improve your credit is a worthwhile goal, because the better your rating, the better the rates you'll receive on all your loans, such as mortgages, car loans and credit cards. With that in mind, it's important to understand the different periods of time that credit repair may involve in order to plan effectively.