How Long Does It Take to Improve Your Credit Score?

So, you performed a CIBIL score check and are dissatisfied with your score. Are you wondering if you can improve it? The answer is: yes. Your credit rating depends on your credit discipline, so you can improve it by adopting healthy credit habits. 

But how long does the process take? Read this article to find out!

How long does it take to rebuild your credit? 

You can take as long as you want to rebuild your credit, so be patient with your efforts. To begin, identify the extent to which your credit score is hurt. Then, you can explore what immediate steps can you take. The recovery process can take anywhere between 6 months to a year, depending upon your credit health and efforts.  

Suppose you are repaying a loan, and you miss a payment. That will negatively affect your score for a while, but you can rebuild it quickly by making payments timely in the future. However, if you continuously miss payments or default on loans, it will damage your score considerably. Therefore, it will take you a long time to recover. 

If you are in this situation, don’t worry, you can take the following steps to rebuild your score. 

Improve your payment history

To improve your repayment history, make payments towards your ongoing debts timely and regularly. These debts include all credit card bills, ongoing loans, and any other obligations.

Keep your credit utilisation ratio below 30%

Your credit utilisation ratio significantly impacts your CIBIL score. Ideally, you should use less than 30% of the total available credit limit for every active credit card. If you regularly use more than 30% of your credit limit or max out your cards, your score will decrease. 

Maintaining a good credit-mix 

If you have a good mix of well-managed credit, it will positively affect your report and CIBIL score. If you have only unsecured loans in your credit history, make sure you include secured credit like home or auto finance in your credit mix whenever you can. If you have just started to build your credit history, you can use a secured credit card. 

Avoiding closing old accounts

It is a myth that closing dormant or old accounts can help you increase your score. On the contrary, doing so can decrease it. Older accounts prove long-term association with lenders, which is considered favourable by the credit bureaus. So, it depicts healthy financial standing.

Avoid having too much debt

Applying for multiple credit cards or loans reflects poorly on your credit report. It increases your debt-to-income ratio and renders you a risky candidate for future loans.

And finally, monitor your credit report regularly

Regularly performing a credit score check is important because it gives you a clear idea about your credit health. So, always read your credit report and learn what factors are harming your score. 

If you find any incorrect information in your report, write to your credit bureau and ask them to make the necessary corrections. By taking simple measures like these, you can surely improve your credit health.