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How Long does it Take to Get a 700 Credit Score from 500?

How Long does it Take to Get a 700 Credit Score from 500?

finance
August 12, 2022
5 min read
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How Long does it Take to Get a 700 Credit Score from 500?
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You may have noticed that your credit score changes frequently if you regularly monitor it. Although little changes in your credit score month to month are common, big changes in your credit score take time. If you already have a credit score of 500, it would take a little more effort for you to get to 700. With the right set of financial practices, you will achieve the targeted credit score.

You may increase your credit score by effectively managing your debt and credit. Reaching the credit score of 700 from 500 will require you to change your financial practices. A credit score of 500 is considered to be average or good by some lenders. However, you may not get some good offers on loans and credit cards with a score of 500. The moment your credit score reaches 700, you are most likely to receive better loan rates and credit card offers. That is because a higher credit score indicates lesser risk in lending to you. 

But if you have a credit score of 500 already and you want to improve your credit score to reach 700, how long should it generally take? Let us find out. 

Time Taken to Get a Credit Score of 700 from 500

For those who have never missed a payment and have been responsible with loan repayment, building the credit score from 500 to 700 will be simple. It may be difficult for people whose payments are routinely late and who lack discipline while making repayments to increase their credit score. 

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. Use your credit card till 30% of its assigned limit or repay the loan on time. Repaying any debt on time and in full strongly impacts your credit score. Establish this habit and you can increase your credit score fast—as long as you can avoid missing the repayment. 

Hence, it can be said that there is no definite time to increase your credit score from 500 to 700. 

Tips to Improve your Credit Score from 500 to 700

There are a various ways if you wish to improve your credit score by 200 points – that is from 500 to 700. However, the key to such an improvement in credit score is patience and financial discipline. Reaching the credit score of 700 might seem to be an easy task, however, maintaining that credit score is also essential for your financial health. 

Listed below are a few ways to improve your credit score from 500 to 700: 

  1. Repayments on Time
    Never miss a repayment. Pay all your dues on time and in full if you wish to increase your credit score from 500 to 700. Missing a repayment or failing to repay the debt will significantly impact your credit score. It is one of the most essential factors that is taken into consideration by all the credit bureaus while calculating your credit score. 
    If you have multiple debts and you are having trouble remembering the deadlines for each of them, you can set up an auto pay. That way your repayments will be done on time and your credit score will not have to be impacted negatively. 
  2. 30% Credit Utilisation
    Financial experts say that you should never spend more than 30% of your assigned credit limit. Going beyond that will indicate that you are credit hungry that is always in need of a loan or credit to manage their day to day activities. It is a well-known fact that we all need credit at some point of time. However, ensure that you do not cross the threshold of 30% if you want to increase your credit score from 500 to 700. 
  3. Avoid Multiple Loans
    Just because you are getting loan offers from various lenders and banks doesn’t mean you should borrow one. Loans should only be borrowed when you need it. When you apply for multiple loans, or you accept the offers from multiple lenders for loans – a credit check is conducted on your profile. Lenders will never extend a line of credit to you without assessing your financial background. With every hard credit check, your credit score will dip. 
    Hence, if you want to increase your credit score to 700 from 500 fast, then avoid making multiple loan applications and keep servicing the existing debts in a timely manner. 

Always put an emphasis on setting priorities and managing your spending by separating important purchases from those that may be put off for later. Try to keep a track of all the expenses you must pay for and cross off any that are not absolutely necessary. Over time, this will improve credit utilisation and help save money. Also building such healthy financial practice will be rewarding in the long run. 

The road to financial recovery takes time, perhaps even years, so keep that in mind and be patient. The best method to deal with financial recovery, though, is to take a proactive attitude, regardless of the situation you may be in. And in the long run, your credit score will improve. 

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FAQs Related to Time Taken for Credit Score to Improve from 500 to 700

How can I increase my credit score from 500?

To increase your credit score from 500, ensure that you repay your existing debts on time. If you are already doing it, you may go a step further and take out new type of loans. Having a healthy mix of credit also helps to boost your credit score. And remember, not to utilize more than 30% of the available credit. 

How fast can I get my credit score to 700?

It may take you 4 months to a year to reach the credit score of 700. Your credit score improvement is completely dependent on your financial activities. If you keep repaying your debt on time, maintain a credit utilisation ratio of 30%, check your credit report regularly, and avoid making multiple loan application within a brief period of time, your credit score will improve fast. Failing to do so may result in a bad or low credit score that may dip below 500 as well. 

How much can a credit score go up in a month?

You may see a change of 100 points in your credit score in 30 days, while some people may witness a change of 200 points in their credit score in just 45 days. Different people will have different financial situation as their financial activity will define the time it will take for their credit score to show an improvement. 

What can I get approved for with a credit score of 500?

A credit score of 500 is considered to be average by most of the lenders. Although the chance of your loan application being rejected is lower with such a score, but you may not find attractive loan rates with a credit score of 500. If you credit score is around 700 to 750, you will find various offers with favourable interest rates by multiple lenders. 

How can I raise my credit score by 200 points in 30 days?

A borrower's credit score is merely a numerical indication of how appealing they are to lenders. While multiple methods are used by lenders to determine credit scores, the majority of them use the same five elements:

  1. Payment history
  2. Credit mix
  3. New credit
  4. Length of credit history
  5. Accounts owned 

It's difficult to predict with certainty will it take 30 days to increase your credit score by 200 points because each person's credit history and credit rating are unique. But if you use the appropriate financial techniques, it won't be long before you start to notice a difference. This could take anything from a few months to a year.