How Long Does It Take to Improve Credit Score?
Dying to know how long does it take to improve credit score?
Having your finances in check starts with having a good credit score. You’ll need to credit to apply for auto loans, personal loans, mortgages and more. Your score might be a source of stress for you if the number isn’t what you’d like it to be.
Life happens, and sometimes you’ll charge too much to a credit card or miss a payment. These factors hurt your score, but you can recover. So, how long does it take to improve a credit score? Keep reading to learn more.
How Long Does It Take to Improve Credit Score?
Credit scores in Canada range between 300 and 900, and 900 is a perfect score. If your score is lacking, it’s possible to recover in just a matter of weeks, depending on what factor caused your score to drop.
Here are five common actions that will lower your credit score, and how long it will take for your score to recover:
1. Bankruptcy
Declaring bankruptcy is the most severe action, and it has grave consequences for your credit. Depending on how you recover from bankruptcy, it could take 6 or more years for your credit score to bounce back.
2. Applying for Credit
Every time a lender inquires about your credit, this hurts your score. When you apply for a new loan or credit card, expect your score to drop for a few months.
3. Closing an Account
Closing a credit card will hurt your score, but only for about three months. This penalty is why you should avoid opening and closing too many credit cards.
4. Missing a Payment
Missing payments has a serious impact on your credit score, so try to avoid this at all costs. If you do miss a payment, it’ll impact your credit score for at least 18 months.
5. Maxing out a Credit Card
Do you know how much you’re charging to your credit card? You should check before you swipe because maxing out a card can damage your credit for three months or more.
Tips to Help Your Score in the Future
The key to getting your credit score up in a shorter amount of time is to have wise financial habits.
Here are three things that will help you improve your score faster and keep it up where you want it to be:
1. Pay on Time
Having good habits month-to-month is the best way to ensure your credit score will stay high. Always pay your bills on time and don’t max out credit cards every month.
2. Limit How Many Accounts You Open
Don’t start opening too many credits or taking out multiple loans. You want to keep your credit usage relatively low for the best score.
3. Save Money
Saving money is another way to improve your overall financial health and ensure you’ll have the money to pay your monthly bills on time. Consider cutting unnecessary expenses and saving where you can. For example, buy a used car instead of a new one.
Get an Auto Loan With Bad Credit
Now that we’ve answered the question, “How long does it take to improve credit score?” you probably still have questions about bad credit. Maybe you don’t have time to improve your score and need an auto loan right away.
We’re here to help you get the auto loan you need, no matter what your score. Give us a call at 613-777-6434 today for more information.