Wouldn’t it be nice to just close our eyes and wish away our bad credit? Being in a position of bad credit can be extremely daunting, and you can find yourself spiralling further and further into debt. It’s important to recognise that experiencing bad credit doesn’t make you a bad borrower.
We all get down on our luck sometimes, and life is extremely unpredictable. Unexpected expenses crop up all the time and it can be hard to stay on top of them. If you’ve found yourself in a position of bad credit, you might be wondering, does bad credit go away?
Does Bad Credit Go Away?
Have you been asking yourself, does back credit go away? If so, the simple answer is yes – it does. Over time you can get rid of your bad credit by changing your financial habits and paying off your loans on time. But in order to fully understand does bad credit go away, let’s take a look at exactly what bad credit is and how it affects your credit score.
What Is Your Credit Score?
Lenders use your credit score to determine whether or not you are worth taking a risk on with a loan. Having a high credit score means you have a good borrowing history and are a reliable lender. On the other hand, a low credit score suggests you have a poor credit history and are a risk when it comes to borrowing money. So, does bad credit go away? Not without some hard work.
There are three different credit agencies that offer a credit score: Equifax, Experian and Illion. While each one differs slightly with how they determine your credit score, there are factors that are common between them.
There are many factors that go into your credit score, and depending on your credit score, the amount of time needed to change the score will differ.
Here are some of the factors that are considered:
- Repayments: have you made all your repayments on time each month? If you have been late, or missed repayments altogether, this will reflect on your credit score and bring it down.
- Amount owed: if you owe a lot of debt, this will have a negative impact on your credit score. It is also affected by how much credit you are using. This is referred to as your credit utilisation ratio. If you have used most of your credit, it suggests you are stretched and lowers your credit score.
- Credit mix: having more different types of credit, such as credit cards, long-term loans, etc, will strengthen your credit score.
- Unpaid debts: any unpaid debts that have resulted in bankruptcy or court judgments will appear as negative listings on your credit report.
Each listing will stay on your credit report for a certain amount of time before it disappears.
Does Bad Credit Go Away?
Now you know exactly what makes up your credit score, you might be asking: does bad credit go away? Not on its own. It takes hard work and a change in the way you manage your finances in order to see a positive result.
Depending on the listings you have on your credit score, the length of time you need to wait to see your score change will vary. But that doesn’t mean you can’t start making positive changes straight away. Here are some things you can do to improve your credit score:
- Pay your bills on time: meeting your repayments on time every time will have a positive impact on your score. This is one of the most critical things you can do to improve it.
- Pay off your debt: set up a schedule to pay off all your debts over time. The less money you have owing, the better for your credit report.
- Limit new credit requests: if you’re already in debt, try and refrain from taking out more debts. Or at least limit the inquiries you make into new lines of credit, as this can bring down your credit score.
- Wait: once you have made all these changes, the best thing you can do is wait. Changing your credit score takes time and won’t just happen overnight. Defaults can take up to 5 years to disappear from your credit file.
- Repair Credit: You can pay a credit repair company to wipe your bad credit away. In some cases, they can fix your credit rating within as little as 30 days. We recommend getting in touch with Clean Credit. They are rated 4.9* on Trustpilot and have a no removal, no removal fee policy.
Taking Out A Loan
What happens if you’re looking to take out a new loan before your credit score has improved? Thankfully, there are options for you. Bad credit loans are aimed at just that. Some lenders give you the opportunity to take out a loan, irrespective of your credit score. They understand that things can happen – and instead of looking at your credit score – they use other factors to determine your reliability as a borrower. This can include looking at bank statements to ensure you will be able to meet the repayments.
If you’re looking at taking out a loan with bad credit, then contact the experts at Bad Credit Loans. We can offer a range of different loan types to suit your needs, so you can access the money you need today.