Years to Repair Credit History

A poor credit rating can halt your attempts at getting the mortgage you need or the loan for buying that new car. Lenders are cautious about giving money to those with a poor financial track record. Depending upon what's on your credit report, it can take a short amount of time or more than a decade to repair credit history.

Less than One Year

When your credit history has suffered a number of setbacks, take a few proactive steps to get your credit score back up to a more attractive level. You can almost instantly fix your credit score by lowering your debt ratio to 30 percent. Fixing errors on your report can improve your score within three months. Paying your bills on time will repair your credit history with each monthly payment, so the more on-time you are, the faster your history will repair.

Seven Years

More serious negative incidents in your financial past take much longer to come off the record. Under the Fair Credit Reporting Act, civil suits, judgments, records of arrest, collection records, accounts that are closed with a negative record of foreclosure records and any late payments and repossession records will remain on your record for seven years. That means when a lender looks at your history, these incidents will be highlighted for seven years.

Ten Years

Bankruptcy filings are the only items that the Fair Credit Reporting Act dictates as serious enough to warrant staying on your credit history for 10 years. However while it is mandatory for a Chapter 7 bankruptcy to remain on your report for 10 years, a Chapter 13 can come off after seven years, at the discretion of the credit bureau. Bankruptcy is the most serious offense for credit reporting and will take the longest time to repair.

Tips

If you have not suffered any of the seven- or 10-year offenses, then there is no reason to allow your credit history to suffer. Even if you have gone through a bankruptcy or any of the seven-year offenses, spend that time to be on your best financial behavior. Do all the little things to keep your score strong and improve it by paying bills on time and keeping debt low. That way, when your seven or 10 years are up and that serious offense comes off your record, your history will look strong to lenders.