Lauren Smith, WalletHub Staff Writer
It usually takes up to 30 days for your credit to improve after paying off a credit card. The exact timing depends on when your billing cycle ends and when the credit card issuer reports the payment to the major credit bureaus. Lenders typically report once a month. Paying off a credit card does not always lead to credit score improvement, though.
You can use WalletHub’s free credit score simulator to find out how paying off your credit card will impact your score specifically. You can also receive daily credit score updates for free at WalletHub.
Credit Report Updates and Your Credit Score
While your credit report will likely update within 30 days, your credit score may not. Your credit score is calculated based on the contents of your credit report, but not every new piece of information on your credit report actually changes your score.
If you already have good to excellent credit, for example, paying off your credit card will help you maintain your current score but is unlikely to increase it significantly. In other cases, the credit-scoring models may need to confirm that a lowered credit card balance is really a sign of newfound financial stability and not just a one-time thing.
Impact of Closing Cards After Paying Them Off
Your credit score may decline if you close your account after paying off your credit card. Closing your account will likely increase your overall credit utilization and may effectively reduce the length of your credit history, both of which are bad for your credit score. Even if you have a $0 balance, it’s ideal to keep your accounts open, especially if there’s no annual fee.
You can check your credit report and your credit score as well as get personalized credit-improvement tips for free here at WalletHub.
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