How Long Does It Take For Your Credit Score To Rebound?

Buying your first Knoxville home is a game of numbers. As a first-time buyer, you’ve probably obsessed with many of those numbers.

It’s the price you’re pre-approved for. Your future mortgage payment. Your loan amount. The price you offer on a home. Your total down payment. Your income.  And, of course, the number that helps make it all possible: your credit score.

If your credit score is currently keeping you from buying your first home, you may be wondering how long it’ll take for your credit score to rebound. In this post, we’ll take a closer look at this age-old question.

How Bad Is The Damage?

Credit scores range from perfect to low. Depending on where your credit score is and how much you need to raise it in order to qualify for a loan, timelines for improvement can take time.

These are the ranges for credit scores:

  • Perfect: 850
  • Excellent: 760-849
  • Good: 700–759
  • Fair 650-699
  • Low: 649 and below

In order to qualify for a loan, you’ll need a credit score of 650 or higher. It’ll vary by loan type and depends on the mortgage lender. So if your credit score is below 650, you have some work to do prior to qualifying for a loan.

How Can You Improve Your Score?

It can be awfully easy to destroy your credit score. Unfortunately, improving your credit score can take some time and effort. Here are a few tips for improving your credit score.

Correct Any Errors On Your Credit Report

Are there things on your credit report that are incorrect? If so, you’ll want to make sure these errors get corrected. This is a relatively simple and quick way to improve your score.

You’ll want to review a copy of your credit report and identify any issues. If there’s an error, you’ll want to contact the credit bureau and submit the supporting paperwork that shows it is an error. Generally, it takes credit bureaus about 30 days to investigate errors.

Pay Your Bills On Time

Paying your bills on time is a simple and effective way to help improve your credit score. It is often late or missed payments that can cause your credit score to take a hit.

When you’re trying to improve your credit, be sure that you make each and every payment on time. If you struggle to remember to pay bills, consider finding a good way so that you don’t, whether it’s creating a calendar of when you need to pay your bills or setting up auto-pay on your big bills.

Pay Down Your Debt

The use of credit is a double edge sword. To build good credit, it is important to show that you’re able to responsibly use debt, however, you don’t want to overextend yourself.

Generally, it is best to use less than half of your credit card limit to maintain a good credit score. If you have a total credit card limit of $10,000, you shouldn’t spend more than $5,000 of your overall credit at one time.

Don’t Apply For New Credit

Every time you apply for a new loan or credit card, there is a ding to your credit score. A large number of credit inquiries can bring down your score.

It can also be a red flag to a lender if you open up a large number of credit lines in a short period of time because it signifies that you may be unstable financially.

How Long Will It Take For Your Credit To Improve?

The good news is, though, people with low credit scores tend to see the quickest improvements. So, if your score is hindering you from buying your first home, with a bit of work, you’ll see some improvement in a couple of months or a year.

Even if you don’t have a low score, but you need improvement, credit scores tend to improve in 6 months or a year. So if your score needs a bit of work before you can qualify for a loan, you should see improvement fairly quickly.

Are you thinking about buying your first Knoxville home? Are you unsure of where to start? Don’t worry – you’re not alone. We’ve helped countless Knoxville first time buyers buy their first home and we’d love to do the same for you. Shoot us a text, email, or give us a call today. Rick can be contacted at 865-696-9002 or via email at Rick@KnoxvilleHomeTeam.Com. Kati can be reached at 865-696-1888 or via email at Kati@KnoxvilleHomeTeam.Com.

Are you ready to start your home search? Visit our home search page to get started today. Or, be sure to keep up with our Knoxville First Time Home Buyer’s Blog to keep up with the latest information about buying your first home.