How Long Does Bad Credit Last

How Long Does Bad Credit Last How Long Does Bad Credit Last? How Long Does Bad Credit Last?Improving your bad credit isnt something you can achieve overnight. It will likely take years before your credit score fully recovers.We get it: You’re sick of staring at a credit score that’s stuck below 600. Whenever you need money in a pinch, youre stuck taking out short-term bad credit loans and no credit check loans like payday loans, cash advances, and title loans. Many of those products can trap you in a dangerous cycle of debt!And yet, while you’ve gotten better about managing your money, your score won’t seem to budge. How long do you have to wait before you’ll see your score improve? How long can bad credit last, anyway? Keep reading for the answer to that question and more Here’s how credit scores work.Your credit score is a three-digit number that summarizes your perceived trustworthiness as a borrower. The most common type of credit score (and also the oldest) is the FICO score, which is scored on a scale from 300 to 850. The hig her your FICO score, the better your credit.Credit scores are based on the information contained in your credit report, which tracks your history as a user of credit. Actually, you have three different credit reports, one each from the three major credit bureaus: Experian, TransUnion, and Equifax. Your credit score can vary depending on which credit report is used to create it.There are five main categories of information on your credit report that are used to create your score. They are your payment history (35 percent of your total score), your amounts owed/credit utilization (30 percent), the length of your credit history (15 percent), your credit mix (10 percent), and your new credit inquiries (10 percent).Last but not least: Most information only remains on your credit report for seven years, after which point it drops off. And while some informationâ€"namely, filing for Chapter 7 bankruptcyâ€"  stays on your report for up to 10 years, a lot of information will stop affecting your score even before it drops off your report.Ask yourself: Why do I have bad credit? If you look back at those five categories of information that are used to create your credit score, you’ll notice that two categories account for almost two-thirds of your score. That’s right, your payment history and your amounts owed/credit utilization are by far the most important parts of your credit scoreand so they’re also two biggest reasons why people have bad credit.In order to improve your credit score, you will need to be responsible with your money. First and foremost, that means paying your bills on time. Second, it means paying down your debtsâ€"and that goes double for high-interest consumer debt from credit cards and personal loans. But how long your bad credit score remains will depend on which category needs the most improvement.When it comes to paying down your debts and improving your credit utilization, the path is pretty clear: The faster you pay down your open balance s, the faster your score will improve. And you should see some marked improvement once you get your open credit card balances below 30 percent of your available credit limits.When it comes to late payments, you’ll have to be extremely diligent, and more than a little bit patient. Even one late payment can cause your score to dramatically dip, which means that you’ll need years of on-time payments across the board in order for your score to fully improve.The later your bill, the worse for your score.If you have already missed a bill payment, you shouldn’t use that as an excuse to drag your feet. According to Mike Pearson, founder of the personal finance site  Credit Takeoff, the longer a bill goes unpaid, the more damage it will do to your score.“First, late payments can stay on your credit report for up to seven years,” he began. “But how long does it actually impact your credit score? It all comes down to how many days late you are.”“If you are 30-60 days late, then one late payment can impact your score for up to two years. But after that, the damage should fall off significantly.”“On the other hand, if youre 90+ days late, then your credit score could be impacted for the full seven years” Pearson continued. “When youre late for this long, the lenders consider you a long-term credit risk and much less likely to pay back future loans on time.“Not only that, but if your late payment falls into collection and results in a charge off, those are two additional negative items that will appear on your credit reports and damage your score even further,” he concluded.So don’t waitâ€"get that late bill paid pronto!Start fixing your score now.Unfortunately, there is no one-size-fits-all answer to the question that we posed up top. Credit scores are complex, and there are too many factors specific to each individual score for us to say with certainty how long it will take your credit score to flip from bad to fair to good.But there are a fe w general rules that we’ve outlined: Almost all information will drop off your report entirely after seven years, and most information will affect your score less as time goes on. The longer that you spend paying your bills on time and digging out of debt, the more positive information there will be on your score, and the more improvement you’ll see.Even if takes years for you to go from bad credit to good credit, there is one piece of advice we can offer: Start now. The sooner you start working to fix your score, the sooner your score will improve. To learn more about improving your credit score and paying down debt, check out these related posts and articles from OppLoans:How to Raise Your Credit Score by 100 PointsThe Debt Snowball Method Can Help You Get out of DebtHow to Build Credit When You Have No Credit at AllThe Debt Avalanche Will Help You Pay off Debt for LessDo you have a   personal finance question youd like us to answer? Let us know! You can find us  on  Facebook  and  Twitter.  |  InstagramContributorsMike  Pearson  is the founder of  Credit Takeoff, a research-driven personal finance site for people looking to improve their credit. A proud member of the 800 Credit Club,  Mike  writes about practical steps that everyday consumers can take to increase their credit scores. His advice on credit repair and credit scores has appeared in QuickBooks, Go Banking Rates, and MortgageLoan.com.