On average, it can take anywhere from six months to several years to build a positive credit rating. But similar to losing trust, you can harm your credit pretty quickly by not paying bills on time or overextending yourself. When this happens, what should you do, and how long does it take to repair your credit? Here are some answers.
What Can Harm Your Credit?
If you want to avoid a long credit repair journey, you can take some steps now to avoid too much damage to your personal or business credit score. How can you do this? Here are some of the top things that can harm your credit:
- Bankruptcy
- Missing a loan or credit card payment
- Collections and charge-offs
- Debt settlement
- High debt utilization ratio
- Applying for too many credit accounts
- Being an authorized user for a poor credit risk
- Credit report errors
- Having too few credit accounts
Credit scores will naturally rise and fall slightly as you use credit, make payments, and open new accounts. But, if you have a poor credit score or a major drop in your credit rating, it makes sense to look at repairing your credit.
How You Can Repair Your Credit
You can repair your credit in a number of ways. The first thing you want to do is pull your credit report from the major credit reporting bureaus. If you’re working on your personal credit, these would be Experian, Equifax, and TransUnion. For business credit, you should get your report from Experian, Equifax, and Dun & Bradstreet.
Review your report carefully and take note of any errors. If you notice any inaccuracies, you need to dispute each one separately. Write a letter to the credit reporting company with specifics about the error on your report and send it by certified mail. If the agency can’t verify the information, they will likely remove it from your report.
Other options for repairing credit include settling outstanding debts, reducing your credit utilization, and disputing inaccurate items directly with creditors.
Average Time It Takes to Repair Credit
The credit rebuilding process is different for everyone. Depending on how much work you have to do, it can take anywhere from 6-18 months to rebuild your credit from around a 500 score to something closer to 700.
But, if you want to have a score that’s even higher, which unlocks some of the best terms, the process could take several years. Fortunately, there are plenty of business and personal financing opportunities you can pursue immediately or shortly after you begin credit repair.
Business Financing Options and Credit Repair
It makes sense to pay close attention to your personal and business credit ratings so you can access the most financing options and get the best possible terms. CAB Capital has access to a variety of business financing opportunities and can help with credit repair. Contact us today for more information.