Coming to grips with credit repair and starting a clean slate can be challenging. Not only does credit repair require much effort, but it also calls for a lengthy period. If so, exactly how long does credit repair take?

In brief, a poor payment history usually takes about five years to disappear from your credit file. However, depending on your financial issue, loan term, and more, your bad credit can remain on your credit history for seven years. You'll need to do your homework to assess your situation and precisely know how long your credit repair will take.

How Long Does Credit Repair Take

Since I've gone through all the hard research work and gathered all the relevant information right here, you don't need to worry about a thing. So, without further ado, let's get acquainted with all there's to know about credit repair.

What Exactly Is Credit Repair

In a nutshell, credit repair means working on your credit rating to improve it to make your applications more appealing to banks or lenders. A good credit score assures your lenders that you can repay your loan on time. You seem more reliable with a good credit rating and will likely get approved for your loan.

The first thing you must understand about credit repair is that it takes time and patience. However, much of it is in your hands, and you can take a few steps to ensure credit repair.

What Is Credit History

A credit history or report is a detailed report of all the money you have borrowed in your lifetime. Your credit score is an accumulation of your credit report results. Getting familiar with your credit history is crucial to know where the problems lay and how to solve them.

Several government-recommended credit reporting bodies supply you with a free copy of your credit report. One of the more reputed among these credit reporting bodies is Equifax, formerly known as Veda.

File Errors by The Credit Reporting Bodies

Believe it or not, sometimes your credit application gets rejected because of stupid administrative mistakes. If you want something other than the sort happening to you, you first want to go through your report carefully and take your time to look for errors.

Here's a list of common errors made by credit reporting bodies.

1. You are getting your name, address, or other personal details wrong.
2. Listing a debt twice.
3. Listing incorrect debt under your name.
4. Not notifying you about an unpaid debt.
5. Listing a default while being in dispute about it.
6. Not Showing that they agreed to change the contract terms or put a payment plan in place.
7. Mistakenly creating an account or creating an account due to identity theft.
8. Putting inaccurate repayment details on your credit report.

What You Can Do

If you spot any file error, you'll need to act quickly. Here's a list of things you can do if you find any file errors.

1. Reach your credit provider and ask them to remove the incorrect listing. If your credit provider acknowledges the mistake, they'll contact the credit reporting body and have it removed from your credit report.
2. If your credit provider refuses to acknowledge the mistake, you must contact the Australian Financial Complaints Authority and file a complaint for free independent dispute resolution.
3. If you find the entire process too complicated, you can always opt for the help of a specialist.

Negative Listing that Can't Be Removed

You won't be able to change or modify any information on your credit report that is authentic. Such a negative listing stays with you for a long time. Although a modest default may remain on your file for up to five years, more severe problems like bankruptcy and debt agreements can stay on your credit history for up to seven years.

Here're a few examples of harmful listings you can't quickly eliminate.

1. Every payment you have made during the last two years with your credit card or loan.
2. Whether you have paid your payments on time or not.
3. Payments overdue by 60 days or more are worth more than $150. These payments remain on your credit report for five years, even after you've paid your due.
4. Every application you've ever sent for credit cards, residential, store, personal, and business loans remains on your credit report for five years.

Things You Can Do to Repair Your Credit Score

Although repairing your credit takes much time and effort, it's still within your grasp. With the right strategy, you can slowly progress and regain your lost credit score. Fair warning, though, it doesn't happen overnight.

Here're a few things you can do to repair your credit score.

1. Make timely payments on your utility bills.
2. Limit the number of applications you're able to make for credit.
3. Reduce the credit card limit.
4. Make timely payments on your rent or mortgage.
5. Use consolidation loans to accumulate all your debts in one place.
6. Contact your creditors if you're having trouble paying your monthly instalments so that the debt doesn't turn into a default.
7. Make timely payments on your credit card each month. You should always pay in full or more than the minimum requirement.

You'll need to do these things consistently and thoroughly over a long period to improve your credit score substantially. Once your credit improves, you'll likely be approved for any financial aid.

Beware of Cons

Many credit repair companies claim they can easily fix your debt and improve your credit score. In most cases, they won't be able to do so, as it takes a lot of time and hard work. These agencies may also charge you high fees to do things you can easily do for free.

Using the services of such companies would likely be a waste of money and no help to the actual improvement of your credit score.

Wrapping Up

While the road to credit repair can be long, you can certainly reach your goal with the right strategy and perseverance. Credit repair can sometimes take up to a year, depending on your financial situation, loan term, and previous history. So the sooner you get started, the sooner you get the results.

Hopefully, all this information on credit repair will help you get started on improving your credit score.