People are fond of timelines. Several online articles talk about what a person should have accomplished at age 20, 30, and so on. Moreover, people obsess about getting out of the rat race. But ironically, they spend their money carelessly. One day, they would just be surprised to see on their credit report that they have bad credit.
There are several causes of bad credit which essentially boils down to lack of discipline. People’s immediate reaction after getting a poor credit rating is to find out how to rebuild credit score. Understanding how to rebuild your credit score is one thing. But, translating that into reality is another.
If you’re wondering how long it is going to take to rebuild a tarnished score, brace yourself. Truth is, there is no generic turn-around time. Every credit report has its specific entries on the reasons why a credit score has gone problematic.
Not making payments within the 30-day grace period.
All you need to do is to organize your calendar better. While you can always call customer service hotlines to waive late fees, late history will remain recorded. Create a personal system in place to keep track of your monthly dues.
Hitting negative information that lasts for seven years.
Late payments on loans and credit cards, bankruptcies, charge-offs, delinquent accounts, and foreclosures are classified as negative information. Any of these can hurt your credit score for seven years.
Hurting score for 10 years after bankruptcy.
Bankruptcy refers to the legal status of a person or entity who is unable to repay outstanding debts. This could reflect on the credit bureau’s record for seven years if only a portion is paid. If there is no payment made at all, the report could linger for up to 10 years.