It can take 12 to 18+ months to build your credit from 500 to 700. The exact timing depends on which types of negative marks are dragging down your score and the steps you take to improve your credit going forward.
You can use WalletHub’s free credit score simulator to find out how specific actions will affect your score and how long it will take to reach your credit score goal.
Average Recovery Time for Negative Marks on Your Credit Report
| Action | Average Recovery Time |
| Applying for new credit | 3 months |
| Closing an account | 3 months |
| Maxing out a credit card | 3 months |
| Missing a payment, default | 1-2 years |
| Bankruptcy | 7-10 years |
Source: VantageScore
Derogatory marks, such as collections or bankruptcies, significantly lower your credit score. However, the negative impact declines as time goes on. You can expedite your credit score’s recovery, too.
How You Can Improve Your Credit Score From 500 to 700
To raise your score as soon as possible, you must inundate your credit reports with positive information. The two most important factors affecting your credit score are payment history and credit utilization. Below, we highlight some of the steps you can take to improve both.
Pay All of Your Bills on Time
You have to consistently pay all of your bills on time in order to build a good or excellent credit score. Even one late payment on your credit report can cause your score to fall by up to 100 points, or even more in some cases.
Late payments can indicate to lenders you are not reliable when it comes to managing your financial obligations, which can make it more difficult for you to obtain credit in the future. If you are having trouble making payments, you should contact your creditors as soon as possible to discuss your options.
Reduce Your Debt
The more debt you have, the worse it generally is for your credit score. You can employ a variety of strategies to help reduce your debt, including simple budgeting and using a balance transfer credit card or debt consolidation loan to lower the cost of what you owe.
In addition, you could attempt to negotiate with creditors to lower your interest rates or monthly payments, or seek professional guidance from a non-profit service. Effective debt management can help you improve your credit score and maintain financial stability in the long term.
Use a Secured Card Responsibly
You can use a secured credit card to build a history of on-time payments. Secured cards usually require a deposit, the amount of which also serves as your credit limit, making them easy for people with a 500 credit score to get approved for. You can compare the best secured cards for free here at WalletHub.
Bring Your Utilization Below 30%
Credit utilization measures how much of your credit limit you’re using, based on your monthly statement balance. It’s calculated for each line of credit you have as well as for all of them together. Keeping your utilization below 30% is good for your credit score, and a ratio of 1-10% is ideal. High credit utilization can signal that you are relying too heavily on credit and may not be able to manage your debts effectively.
You can use WalletHub’s free credit score simulator to find out how specific actions may help your credit and get personalized credit-improvement tips from our analysis tool.
This answer was first published on 04/04/23. For the most current information about a financial product, you should always check and confirm accuracy with the offering financial institution. Editorial and user-generated content is not provided, reviewed or endorsed by any company.
FAQs
The time it takes to raise your credit score from 500 to 700 can vary widely depending on your individual financial situation. On average, it may take anywhere from 12 to 24 months of responsible credit management, including timely payments and reducing debt, to see a significant improvement in your credit score.
How to go from 500 to 700 credit score in a year? ›
6 easy tips to help raise your credit score
- Make your payments on time. ...
- Set up autopay or calendar reminders. ...
- Don't open too many accounts at once. ...
- Get credit for paying monthly utility and cell phone bills on time. ...
- Request a credit report and dispute any credit report errors. ...
- Pay attention to your credit utilization rate.
The time it takes to increase a credit score from 500 to 700 might range from a few months to a few years. Your credit score will increase based on your spending pattern and repayment history. If you do not have a credit card yet, you have a chance to build your credit score.
How to rebuild credit from 500? ›
Tips to work on your 500 credit score
- Apply for a secured credit card. ...
- Get a credit-builder loan or a secured loan, which allows you to build credit and savings at the same time.
- Ask someone you know with good credit to add you as an authorized user on their credit card.
- Practice good credit habits.
It can take 12 to 18+ months to build your credit from 500 to 700. The exact timing depends on which types of negative marks are dragging down your score and the steps you take to improve your credit going forward.
Is 650 a good credit score? ›
As someone with a 650 credit score, you are firmly in the “fair” territory of credit. You can usually qualify for financial products like a mortgage or car loan, but you will likely pay higher interest rates than someone with a better credit score. The "good" credit range starts at 690.
Is 500 a poor credit score? ›
Your score falls within the range of scores, from 300 to 579, considered Very Poor. A 500 FICO® Score is significantly below the average credit score. Many lenders choose not to do business with borrowers whose scores fall in the Very Poor range, on grounds they have unfavorable credit.
Why did my credit score go from 524 to 0? ›
Credit scores can drop due to a variety of reasons, including late or missed payments, changes to your credit utilization rate, a change in your credit mix, closing older accounts (which may shorten your length of credit history overall), or applying for new credit accounts.
How fast can you realistically build credit? ›
How soon can you see improvement? The length of time it will take to improve your credit scores depends on your unique financial situation. At the earliest, you may see a change between 30 and 45 days after you have taken steps to positively impact your credit reports.
What credit score do you start with? ›
Instead of starting from the bottom, you'll actually start with no credit score instead — and that's not as bad as you might think. Implementing the behaviors to establish good credit is essential to what credit score you start with, but that's after meeting the criteria to get past the no credit history phase.
Those with credit scores from 580 to 669 are generally seen as “subprime borrowers,” meaning they may find it more difficult to qualify for better loan terms. Those with lower scores – under 580 – generally fall into the “poor” credit range and may have difficulty getting credit or qualifying for better loan terms.
What's a bad credit score? ›
A bad credit score is a FICO score below 580, meaning it falls in the poor credit range. Along the same lines, a bad score in the VantageScore model is one below 601, which would belong in the poor or very poor credit ranges.
What can a 600 credit score get you? ›
What Does a 600 Credit Score Get You?
| Type of Credit | Do You Qualify? |
|---|
| Unsecured Credit Card | YES |
| Home Loan | YES (FHA Loan) |
| Personal Loan | MAYBE |
| Auto Loan | MAYBE |
1 more rowThe time it takes to raise your credit score from 500 to 700 can vary widely depending on your individual financial situation. On average, it may take anywhere from 12 to 24 months of responsible credit management, including timely payments and reducing debt, to see a significant improvement in your credit score.
What is a perfect credit score? ›
And when it comes to credit, 850 is the highest the FICO® Score☉ scale goes. For more and more U.S. consumers, practice is making perfect. According to recent Experian data, 1.54% of consumers have a "perfect" FICO® Score of 850.
How to raise your credit score 100 points in 30 days? ›
Steps you can take to raise your credit score quickly include:
- Lower your credit utilization rate.
- Ask for late payment forgiveness.
- Dispute inaccurate information on your credit reports.
- Add utility and phone payments to your credit report.
- Check and understand your credit score.
- The bottom line about building credit fast.
For instance, going from a poor credit score of around 500 to a fair credit score (in the 580-669 range) takes around 12 to 18 months of responsible credit use. Once you've made it to the good credit zone (670-739), don't expect your credit to continue rising as steadily.
How long does it take to get from no credit to $700? ›
If you have no credit history, it could take 6 months to a year to reach a decent credit score around 700 with FICO® or VantageScore® models.
How to get an 800 credit score in 1 year? ›
Making on-time payments to creditors, keeping your credit utilization low, having a long credit history, maintaining a good mix of credit types, and occasionally applying for new credit lines are the factors that can get you into the 800 credit score club.
Can my credit score go up 40 points in a month? ›
You can quickly increase your credit score by 40 points by reducing your utilization, disputing errors on your credit report, adding on-time rent or utility bills to your reports, and keeping up with your current payments. It is possible to improve your credit score in one to two months.
