A credit score is a sensitive number that ranges between 300-900. A credit score determines your creditworthiness and summarizes your financial repayment capacity. According to the credit bureaus score close to 900 is good and a score above 750 is enough to make you eligible for financial products. But the credit score below requires maximum time to increase.
Credit scores with no credit history or nil usage of credit take few months to improve. But an individual with loans or missed EMIs payments can get their score improved in less time. There is no shortcut to improve your credit score overnight, it requires both time and patience. It can take several months or even years to enhance a good credit score.
How Long It Takes to Improve Your Score?
The length of time it takes to improve your credit score depends on a combination of several aspects. Your financial habits, the initial reason for the low score, and where you currently stand all are major components, but there is no exact way to determine the timeline.
According to the study of CNBC and FICO, an estimate of recovery time for those with poor and fair credit is given in the following table.
|Event||Average Credit Score Recovery Time|
|Home foreclosure||3 years|
|Missed/defaulted payment||18 months|
|Late mortgage payment (30 to 90 days)||9 months|
|Closing credit card account||3 months|
|Maxed credit card account||3 months|
|Applying for a new credit card||3 months|
What affects Credit Score Update Timing?
The credit score update timing is based on the timing of changes to your credit report. Since your credit score is calculated instantly using credit report information at a given point in time, all it takes to increase your credit score is a positive change to the information on your credit report.
Simultaneously, if negative information is added to your credit report, you can offset positive changes that might have seen to your credit score. For instance, if you have received a credit limit increase but late payment is also added to your credit report, you may not see your credit score increase.
Due to this negative information, your credit score could fall and that is why it takes longer to improve your credit score. For instance, if you have a bankruptcy, foreclosure, debt collection, repossession, on your credit report it can take longer to improve your credit score. The more recent negative information is, the more it will affect your credit score.
How to Monitor Your Credit Score?
To monitor your credit score for free, go to the website called creditkarma.com or creditsesame.com through which you can access your credit score to your non-FICO credit scores for free. Credit Sesame delivers monthly updates to your Experian credit score and Credit Karma updates your TransUnion and Equifax credit score daily.
Some credit card issuers like First National Bank of Omaha, and Barclaycard give their cardholders free FICO scores each month.
How Soon Will Your Credit Score Improve?
Unfortunately, there is no exact way to determine how soon your credit score will go up or by how much. It can take at least the amount of time it takes the business to update your credit report. Some businesses give credit report updates monthly while some daily.
Once your credit report is updated with positive information, there is no guarantee your credit score will increase enough to make a variation with an application. You can see your credit score decrease based on the significance of the change and other information on your credit report.
What you can do is watch your credit score to see how it changes. You can use a credit monitoring service if you are concerned about incorrect reporting on your credit score.
Estimating Credit Score Changes
If you want a credit score report and score to update, you can use a credit score simulator to estimate credit score changes. Credit Karma and myFICO offer a credit score simulator that determines how your credit score might change if credit report information changes.
The Credit Karma simulator offered through myFICO with a three-bureau subscription plan and is included with your free membership to their service.
Rapid Rescoring for Fast Credit Score Updates?
There is a service called Rapid Rescoring which gives you access to credit updates in a narrow set of circumstances. If you are applying for a mortgage loan, the lender will offer Rapid Rescoring Service. This service will update your credit score within 48 to 72 hours.
But this service does not work for every situation. It is only available with certain mortgage lenders when you are trying to qualify for a mortgage or better terms. You have to give proof of incorrect information on your credit report, such as a payment incorrectly reported as late. Rapid Rescoring is not available directly to consumers or with other types of businesses.
The UltraFICO which is FICO’s new credit score system helps to boost your score by allowing access to bank information. Lenders use this service to offer the score to you if you have an application turned down. UltraFICO may raise your credit score if you have a history of managing your bank account well.