How long does credit repair take?
Minneapolis, MN: As a mortgage loan officer, how long does credit repair take is a question I receive multiple times a week. The fast answer is that it depends.
No two credit profiles are the same, therefore for one person, it can be pretty quick, while the next person, it can take a significant amount of time. So a generic how long does credit repair take answer is impossible.
What is pulling down credit? Bankruptcies and foreclosures, collection items, judgements, incorrect items, max'd out credit cards, or just a slow payment history? All of these effect credit differently.
Paying down, or better yet, paying off max'd out credit cards is probably the easiest thing most people can do to increase their credit score quickly. The higher your use of credit card compared to the limit, the worse it is for your score. The closer to the card being max'd out, the more it hurts. Pay down those cards and watch your score jump up.
For major items, like bankruptcies and foreclosures, elapsed time since the negative event is about your only hope for improving credit scores. Especially for bankruptcies, it is very important to have current and active tradelines to rebuild credit.
TIP: You do NOT have to use credit cards, just have them. Follow this link for information on mandatory waiting periods before you can get a new home loan after a bankruptcy, foreclosure or short-sale.
Plain old late payments are similar. How long has it been? If you just got current on say, old student loans, your score will not just jump up because you made ONE on time payment. You'll have to show a history of on time payments. You can figure at least a year of on time payments to help your credit score.
Collection items and judgements fall into two catagories. Recent issues, and old issues. Paying off recent collections and judgements should have an immediate impact of increasing your credit score at least a little. Really old collections and judgements, can, at least in the short term, actually lower your score by paying them off. But in the long-term, it is still best to pay them.
Incorrect items, like a recent late payment that is in error. Once removed, you should see a quick increase in your credit score.
I am not a giant fan of most credit repair companies, as most people can do their own repair with just a little knowledge. But if you have a lot of repair to do, or feel overwhelmed by it all, by all means, employ a reputable credit repair company to assist you.
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Joe Metzler is a Senior Mortgage Loan Officer for Minnesota based Mortgages Unlimited.
He was named the 2014 Minnesota Loan Officer of the Year, and Top 150 Loan Officers in the Nation for 2010, Top 100 for 2015, and Top 300 in 2016. He provides Home Mortgage Loans in MN, WI, and SD. He can be reached at (651) 552-3681
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