In today’s world, having a good credit score ensures financial security and an easier life. It helps ensure that your application won’t be rejected while applying for home loans. Furthermore, you may even become eligible for the best interest rates available. However, unnecessary financial mistakes may negatively affect your credit score. In such scenarios, you may not be able to improve your credit score instantly, but you can work toward credit score recovery.

Steps for credit score recovery

If your credit score is lower than expected, it is time to pay attention and put serious effort into recovering the score. For this, you must follow certain steps to recover your credit score.

• Check your credit score report regularly- You must always check your credit score report regularly and understand the details. Your credit report includes ten years of data you can review. You can also raise disputes about it. The more attentive you are, the more improvement you will see in your credit score.
• Pay your bills on time- Unbeknownst to many, the payment history accounts for 35% of one’s credit score. This is why it is strongly recommended to pay your bills on time. You can structure methods like autopay to ensure every bill gets paid within the due date. In case of some bills, like healthcare bills that don’t support autopay, you must clear them off as soon as you receive them.
• Stabilize your credit utilization report- Experts often advise against using the entire credit limit available. You can limit this usage to 30% and arrange your expenses accordingly. You can ask your credit card provider to increase the credit limit to reduce utilization.
• Avoid creating new credit accounts- Applying for new lines of credit will lead to hard inquiries regarding your finances, which can negatively impact your credit score. For reestablishing your credit score, limit how often you apply for new accounts.
• Keep the old account active- Your old credit accounts can effectively improve your credit score. You should keep these old accounts even if you have already paid them off. Keeping these accounts active will support the length of your credit history.

Time required to reestablish your credit score

The amount of time it takes to fix a damaged credit score depends on several factors.

• Rebuilding expectations- Everyone has a different perspective on rebuilding credit. Some may want an average credit score, while others wish to have a perfect one. The expectations of a person influence the time needed for rebuilding.
• Existing credit issues- Existing issues like late payments, several inquiries within a short span, and high credit utilization will continue to impact your credit score for a long time.
• Bad credit- You must avoid making mistakes that can push you to the ‘bad credit’ category. Such mistakes will make it difficult to get back to excellent credit.

Some missed payments initially will not impact your credit score. However, if you keep falling behind in your payments for multiple accounts for 90 days, this behavior will impact your credit score negatively for a long time.

Credit score recovery is not hard, but it is best to refrain from indulging in mistakes that risk and damage your credit score. By focusing on the abovementioned steps, you can get a loan approved without hassles. Furthermore, you will be eligible for discounts on interest in the future too.