If you're looking to improve your credit score, you may be wondering how long it takes to go from 500 to 700. The answer depends on your credit history and how well you use your credit. Generally, it can take anywhere from a few months to a few years to increase your credit score from 500 to 700. It usually takes just three to six months to build credit out of thin air.
With good spending habits and payment history, you can even achieve a 700 credit score in one year. However, if you start out with bad credit due to non-payment or debt in collections, it may take much longer to build up your credit. That's because late payments, collections, and bankruptcy can stay on your credit report for 7 to 10 years. To get a credit score from scratch, you first have to use credit, such as opening and using a credit card or paying off a loan.
It will take about six months of credit activity to establish sufficient history to obtain a FICO credit score, which is used in 90% of credit decisions. FICO credit scores range from 300 to 850, and a score above 700 is considered a good credit score. Scores above 800 are considered excellent. Depending on your credit history, you may very well be able to improve your credit score by 100 to 150 points in 90 days. If you've just come out of bankruptcy and your score is 450, it will take much longer.
For many people, it's still a reasonable goal. The moment your credit score hits 700, you'll most likely receive better loan rates and credit card offers. Reaching a 700 credit score may seem like an easy task, however, maintaining that credit score is also essential to your financial health. To increase your credit score from 500 to 700, start by understanding the basics of how your credit works. Make sure you pay all of your bills on time and keep track of your spending. If you have any debt in collections or late payments on your record, work on paying them off as soon as possible.
You should also consider getting a secured or unsecured loan or opening a new line of credit if you don't already have one. Finally, make sure you check your credit report regularly for any errors or discrepancies that could be dragging down your score. With the right strategies and dedication, you can increase your credit score from 500 to 700 in no time.