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How Long Does It Take To Repair Your Credit Score?

01/15/2019 @ 4:43 am

Shopping for a new car is stressful and seemingly impossible when you have a low credit score. Many people searching for a bad credit car loan in Oakville have found that out the hard way.

While it would be easy to just give up, you also need a car. With poor credit, you’ll be paying too much for your ride. Bad credit can also keep you from getting the kind of car you need. It’s an unfortunate but true fact.

Fixing your credit involves a mixture of activities. Some of the fixes take longer than others, so repairing a low credit score doesn’t always take the same amount of time. We explore the different factors so you can assess your situation fully.

Fixing Credit

Seeing that you credit score has taken a dive is never a comforting thing. While your first reaction might be to despair, eventually you’ll begin to wonder what can be done about the situation. Fortunately, there are things you can do to repair your credit score.

So much depends on your credit score, including what kind of interest rate you qualify for when getting a bad credit car loan in Oakville. Anyone looking for a bad credit car loan in Oakville likely understands how frustrating it is to be facing a higher monthly payment because of past troubles. Some creditors won’t even extend credit to you because your score is too low.

Like fixing a car, repairing your credit takes some time.

By taking the right steps, you can actually repair your credit score in a relatively short amount of time. That means no having to wait years and years to get back on your feet.

What’s Good Credit?

Of course, everyone’s definition of “good” credit might not be the same. For some, a certain score might seem acceptable, while other people view that same score as horrible. While to a degree good credit can be subjective, certain scores will help you avoid many of the problems with getting qualified for lines of credit.

Credit scores can range from 300 to 900 points. The higher the score, the less of a risk you are in the eyes of potential lenders. That means you want the highest number on your credit score possible, but not everyone can achieve 900. If your score is particularly low, a bad credit car loan in Oakville might be your only hope.

Once your score is above about 600 or 650, being able to obtain some credit will be doable. Even better is rising to 700 or higher, since that’s the level where most people can start to get reasonable interest rates on loans. At about 760 or higher you’ll start to get some of the best interest rates on loans at any given moment. This is a good goal to shoot for, but if your credit is challenged, getting to the other two levels should be what you set your sights on first.

Working toward a financial goal helps you repair your credit.

As you do what’s necessary to fix your credit, it’s good to have a goal. Not only can you aim for a certain score, you’re working to achieve a certain lifestyle. This could be having good enough credit for a dream vacation or a better vehicle. With that in mind, you can withstand the temptations to engage in irresponsible behavior which will in turn lower your credit score.

Repair Pace

The reality is that how long it takes to repair your credit score really depends on why it’s low in the first place. That might not be the answer everyone is looking for, but it’s the truth.

If, for example, you just don’t have credit history since you’re starting out, the good news is raising your score doesn’t take that much time. All you need to do is access credit and make all your payments on time. As you gain even more lines of credit, your score will continue to increase

Sometimes your credit score is low because you have a lot of debt. That throws off the debt-to-credit ratio. The solution is to pay down those debts, maybe even completely eliminating some. You might take on extra work and cut back on spending to make that happen, accelerating the credit repair process.

Sadly, financial slip-ups like a bankruptcy, missed payments on loans, etc. make repairing your credit score a longer process. Those negative marks stay on file for years, affecting your score to one extent or another. Depending on other factors like the number of credit lines you’re maintaining in good standing, it might be months or several years before you can fully repair your credit score. That could make going for a bad credit car loan in Oakville a necessary thing in the meantime.

Acting Now

Nobody wants to hear that all they can do to fix their credit is wait for months or years. While it can take a while to completely repair your credit score, that doesn’t mean you can’t do anything to help improve it now.

A few different plans of action can positively impact your score within about the next month. Many of these are simple, so you really don’t have an excuse for not trying them out.

Negotiate with old creditors to pay off debts in collection. You’d be surprised how many creditors are willing to strike a deal, sometimes even for paying off only a portion of the original debt. When you do, get in writing that holding up your end of the deal means the creditor will report the debt as “paid” on your credit report.

Fix errors on your credit report. Most people don’t even bother to pull their credit report, despite the fact that mistakes on it could be unnecessarily hurting their score. You’re entitled to a free report from Equifax and TransUnion once a year for free. It’s a way to see if any inaccuracies are hurting your score. If so, dispute that item.

Check and fix your credit reports online.

Get more credit by asking. If you have a line of credit, sometimes all it takes is asking for a higher limit to see it increase. Not only does this mean you have more options with that line, the limit increase will in turn boost your credit score.

Ask someone with great credit to add you as an authorized user to one of their accounts. First, you need to find a family member who will trust you with such an arrangement, since you could technically generate a huge bill they would need to pay. Even if you don’t technically use the credit line, each payment made on time will boost your score.

Any of these short-term steps could help you avoid a bad credit car loan in Oakville.

Long-Term Strategies

While a quick solution is great, you need to keep in mind that maintaining a high credit score is a lifetime achievement. Repairing your credit quickly will only get you so far, while good habits will keep that number increasing to the point you have excellent credit, so you never again need a bad credit car loan for Oakville shoppers.

This includes planning to pay all debt installments on time, paying down debt quickly, negotiating for higher credit limits, and using a variety of debts like credit cards, car loans, etc.