There is no quick fix to repair your credit score. It may take several months to do up your credit issues depending on your situation. The following are the factors that play a crucial role in the determination of your credit points.

• Payment history – 35%
• Credit utilisation – 30%
• A length of credit history – 15%
• New credit – 10%
• Credit mix – 10%

The average credit score recovery time depends on the type of event that led to the decrease. The following table reveals the average time for credit score recovery:

Event	Recovery time
Missed/defaulted payments	18 months
Foreclosure	3 years
High credit utilisation ratio	3 months
Bankruptcy	6 years
Hard credit inquiry	3 months
Late mortgage payments	9 months
Maxed credit card accounts	3 months

How long do derogatory marks stay on your credit report?

Lenders are supposed to inform credit reference agencies of your on-time payments, new inquiries and late payments that are used for the calculation of your credit score. Unfortunately, bad events stay on your credit file for a long period of time.

Once they are recorded on your credit report, they will not drop off until the stipulated timeframe is over. Even though you have turned over a new leaf, those derogatory remarks will keep showing up on your credit file for that particular time period.

Event	Average time on your credit report
Missed payments and defaults	6 years
Foreclosures	7 years
Hard inquires	2 years
Debt collection	7 years
Chapter 10 bankruptcy	10 years
Chapter 13 bankruptcy	7 years

• Missed payments or defaults

Payment history makes up a 35% proportion of your credit rating, so there is no chance you can afford to miss a payment. Lenders usually give you a grace period of 30 days to clear your dues. Depending on the nature of your contract, a lender might add it to your next instalment along with late payment charges.

However, if you fall behind on the payment again, they will immediately report credit reference agencies of your defaults. You are recommended to reach out to your lender if you are struggling to make payments on time. They may put you on a different repayment plan. Seeking help from your lender is always a better option than ignoring your obligation.

• Hard credit inquiries

Every time you apply for a loan or a credit card, your lender will check your credit file to know your past payment behaviour. These inquiries leave search footprints on your credit report, and they stay for up to two years.

Similar credit inquiries within a period of 14 days count as one, so make sure you apply for the same loan from different lenders within two weeks.

For instance, if you are shopping around for a mortgage and loans without a guarantor, each inquiry will be considered a different one as both loans are completely different. The “rule of 14 days” is applicable when multiple inquiries have been made around the same type of loan.

• The high credit utilisation ratio

A high credit utilisation ratio can lower your credit points because it shows that you rely on your debt for most of your expenses. On no account should it be more than 30%. A higher credit utilisation ratio can lead to a max-out of the credit card balance. You can prevent your credit points from being affected if you clear your balance before your credit card provider informs credit reference agencies. Time plays a very important role in this case.

• Foreclosure

Foreclosure has a very bad impact on your credit score. This is a legal process that starts after three months. Borrowers with a good credit rating will notice a sharp decrease after foreclosure. Once it is up in your credit file, it will take years to recover your credit points.

• Bankruptcy

Bankruptcy will have similar effects to foreclosure on your credit file. Borrowers with healthy credit reports see a dramatic fall in their credit points, and it keeps showing up on their credit file for seven years.

Lenders do not need your credit report to know your score

Derogatory marks will continue to show up on your credit file until they are past the stipulated timeframe. Your lender will look at your credit file to see your past payment behaviour. There are many factors that they consider to make their lending decision, and credit rating is just part of it.

A recent inquiry or bankruptcy will certainly disqualify you from applying for a new loan, but when they are too old, they will not influence the decision of a lender. However, interest rates will still be unattractive.

Ways to do up your credit score

Here are the ways to make your credit report better:

• It is vital to pay off all your debts on time. If you are unable to clear your accounts, make sure you talk to your lenders to know a different repayment plan.
• Use a credit builder loan to build your credit rating. You will pay down the debt within six months. On-time payments will help fix your credit score.
• Do not exceed the maximum limit for your credit card.
• Keep the debt-to-income ratio up to 25%.
• Do not apply for a new loan immediately after the settlement of the other.
• Become an authorised user of someone’s credit card.
• Create an emergency cushion to meet unforeseen expenses. However, if you still need some money, you can take out very bad credit loans from direct lenders in the UK on benefits. Make sure they are affordable, and you do not borrow more than you can repay.

The bottom line

It is hard to give a straight answer to how long it takes to improve your credit score. It can take several months depending on the cause of it. In some cases, it takes only three months, while in other cases, it can take a few years.

Experts suggest that you borrow money responsibly. You should never borrow more than you can afford to pay back. Keep your credit utilization ratio and debt-to-income ratio as low as possible.