Mary Grace McCormick, Credit Writer
It takes one to two months for a credit score to update after paying off debt, in most cases. The updated balance must first be reported to the credit bureaus, and most major lenders report to the bureaus on a monthly basis – usually when the monthly account statement is generated. Credit scores reflect the contents of credit reports, so the paid off debt will impact your credit score once it gets added to your credit report.
As a result, how long it takes for a credit score to update will depend on the creditor and the timing of your payment.
The Bigger the Creditor, the Faster Your Score Will Update
Most large creditors report user activity to credit bureaus once a month. In these cases, you can expect to see the payment reflected on your credit history within 30 days of payment. On the other hand, if your creditor is a smaller entity, they may only report activity to credit bureaus once a quarter. It’s possible in these situations for your repayment to appear on your credit history months after your payment was posted.
What to Do When You Can’t Wait for Your Score to be Posted
Sometimes it won’t be practical to wait a month or more for your credit score to update. Maybe you’re thinking about a big purchase like a house or a car, for example. In these situations, there are a couple of things you can do to speed up the process of updating your credit report. They all have limitations, however.
Rapid Rescoring: With rapid rescoring, which is an option if you are buying a home, you work with your lender to report credit activity in real time. When you pay off a debt, you and your lender request an update from your credit bureau to get your new score in 2-7 days. Lenders are not allowed to charge for rapid rescoring as a separate service, so they will most likely build it into their fee.
UltraFICO: This new FICO credit score system, launched in 2019, uses banking information alongside traditional credit bureau information to assess a credit score. Basically, customers can allow access to their bank accounts for a potential increase in score based on bill payments that usually wouldn’t be taken into account.
Contact the Credit Bureaus Directly: If your credit report does not reflect a recent payment on a debt, you may need to contact the credit bureau directly to have them correct the error. You can expect a response to your dispute within 30 days.
How to file a dispute online:
- Sign into your account with the credit bureau
- Select the reason for your dispute and, where applicable, submit any documentation that supports your claim
- Submit your dispute
- Wait for a response and an update to your credit report (bureaus must respond within 30 days)
Your credit score should update about one to two months after paying off a debt. No matter how long it takes, remember that payment history and amounts owed are not the only elements that factor into your credit score. Credit utilization, credit inquiries, derogatory remarks, and the age of your debt also play a role. You can read more in our credit score guide. You can also track your progress with free daily credit score updates from WalletHub.
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Michael Smith, Certified Financial Planner
For most things (credit cards, car loans, etc.), they report your payment status to credit bureaus monthly. So, if your January bill was late & you pay it in February - it will get to the credit bureaus in March or April. If I had to give a time range, I'd say 60-90 days after you pay it, you'll see an uptick in your credit score.
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