Good credit is a lot like trust it takes years to build but can fall apart in minutes.

But, having a bad or poor credit score isn’t the end of the world. If you’re simply willing to work hard to improve your credit, then you’ve already started. Now, you’re probably wondering how long it takes to rebuild your credit. The true answer is “it varies."

What Impacts Your Credit History?

There are many different factors in determining your credit worthiness (i.e. how risky it is to give you a loan). When deciding if they want to approve your loan or credit card application, lenders are especially interested in:

Whether or not you’ve made past payments on time.

How much you paid off each time do you make minimum payments, pay the entire amount or pay some amount in between?

Your number of open lines of credit, credit cards, mortgages, student loans, etc.

Your Credit Utilization Ratio (your amount borrowed over your available credit) — for example, if you have $10,000 in available credit and you have an ongoing balance of $8,500, then you’re using 85% of your credit! Limit yourself to utilizing no more than 30% of your available credit each month.

If you have a bad or poor credit score don’t despair there might be a couple areas you can improve. One way to pinpoint an area where you’re struggling is to request a free copy of your credit report and look for red flags that could use improvement. For instance, if you have several lines of credit open, consider focusing on paying off your cards with the highest interest rates. This will lower your credit utilization ratio, which will help to improve your credit score.

Meanwhile, continue making minimum payments on your other cards that have lower interest in order to build up a history of on-time payments, which plays a major role in determining your credit score.

For more help with your credit report visit our Homeownership Course