Buyers may be able to boost their credit scores by 15-20 points in only a few months by paying bills on time and lowering their credit card balance.

NEW YORK – The higher your credit score, the better your chance to snag a lower mortgage rate and potentially save tens of thousands of dollars over the life of a loan. But one missed payment or a default can instantly bring a credit score down.

“Depending on your credit history, a 15- or 20-point shift could mean the difference between being approved or declined – or better terms or higher costs,” says Rod Griffin, the director of public education at Experian.

The top way to increase your credit score: Pay your bills on time and reduce your credit card balance. That habit alone can improve a score as quickly as within a few billing cycles.

“As a rule of thumb, you could see an appreciable difference in six months,” says Ted Rossman, an industry analyst at

However, “if a missed payment has dragged your score down, your score could rebound in a month or two; a series of late payments will take longer to make a full recovery,” Griffin adds.

The recovery for a late mortgage payment can take about nine months for a credit score to recover. Filing for bankruptcy could take as long as five to 10 years.

The overall credit history of the borrower plays a significant role in how fast they can recover from financial mishaps, says Griffin. But “the better your scores are to start with, the more difficult it is to improve them.”

A lower credit score reflects a pattern of missed payments, so adding one more missed payment isn’t as significant. But a person with a clean credit report who misses a payment will see a bigger impact, Miron Lulic, founder and CEO of SuperMoney, told CNBC.

However, the goal needn’t be a perfect score, but “the goal is to have a score that qualifies you for the best terms of rates, generally 750 or above,” Griffin says.

Overall, credit scores recently have been at an all-time high, according to FICO. FICO credit scores range from 300 to 850.

Source: “Here’s How to Improve Your Credit Score Right Away,” CNBC (Feb. 25, 2020)

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