There is no quick fix for a bad credit score. This is because a credit score is a reflection of a person's credit history. In formulating the score, credit reporting agencies draw information from the past decade of a person's lending. Although many near-term improvements in a person's lending habits can definitely help hike up a score in a short period of time, serious, lasting improvements in a person's score can take years to accomplish.
Paying Off Overdue Debts
The surest near-term fix to a credit score is to pay off overdue debts that are dragging down your score. When you become delinquent on a loan, this late payment is reported to credit reporting agencies. Your score will suffer particular damage if your account is listed as being in collections, meaning that the company believes you are no longer actively servicing the debt and has sent the debt to the collections department or to an outside agency.
Lower Your Debt-to-Credit Ratio
After paying off overdue debts, start paying down your balance. Your credit score is affected in large part by the ratio of your outstanding debt to your credit limit. The higher this ratio ascends, the more depressed your score becomes. By paying off some of your outstanding balance, you can push this ratio back down. According to Bankrate.com, its best to try to keep this ratio at least under 30 percent. These efforts should take effect relatively quickly, usually within a month.
Take Out New Loans
A longer-term fix to bad credit is to take out new loans and to then consistently repay them on time. The length of time that establishing a new, positive credit history will take to balance out your past sins will depend on factors including how much damage you did to your credit score and how consistent you are in paying off new loans. Your score should begin ticking up within six months and continue indefinitely.
Stay Patient
Good credit can takes several years to establish, while top-tier credit may take seven years. To regain a score that will entitle a borrower to the lowest interest rates on loans -- meaning that he is an extremely safe bet to loan to -- a borrower may have to wait for the negative information to be wiped off his report. According to U.S. federal law, most negative information can remain on the report for a maximum of seven years, and bankruptcies for 10 years.
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