How Soon After Paying Off Debt For My Credit Score To Change?

How Soon After Paying Off Debt Do I Have To Wait For My Credit Score To Change?

 In Blog, Real Estate Questions

If you are in debt, you should understand the situation is temporary.  Do not lose hope.  Pay down your debt in due time and your credit score will gradually increase.  The length of time you have to wait to see this increase depends on your unique financial situation.  Everything from your debt load to the length of time your line(s) of credit have been open, account charge-offs and the length of time that has passed since your last payment influence your credit score.



Play the Waiting Game

There is no way to determine exactly when your credit score will increase after paying off debt.  In general, it takes several months for credit scores to significantly increase after debt is paid.  Your credit score should rise at least 50 to 100 points in the months after you pay your debt.  The wait is due to the fact that it takes some time for businesses to transmit credit report updates. 


The best possible scenario is a credit score increase in the days after the debt payment.  However, most people have to wait a minimum of several weeks if not several months for their credit score to increase.  It is even possible for your credit score to decrease if you pay off the entirety of your debt.  The unfortunate truth is carrying some debt is good for your credit score.  Furthermore, if you do not use a line of credit for six months or longer, the lender might decide to close your account as you are not a profitable customer.




The Factors That Influence Credit Score Updates

Credit scores are calculated with data from credit reports.  If your credit report is not updated in a reasonable amount of time, it will take quite a while for your credit score to increase.  It will be difficult to qualify for a new line of credit in the days, weeks and possibly even months after paying off debt.  The period of lag noted above will likely disqualify you from obtaining a large loan for a major purchase such as a home or a new automobile.  Be patient and your credit score will gradually increase in the months ahead as your credit report is updated.



Wait a Month Before Taking Action

It is a mistake to complain to the credit bureaus and lending institutions about an unchanged credit score until at least a full month has passed.  As detailed above, it might take several months for your credit score to increase after paying down debt.  Though it would be nice if paying off debt immediately improved your credit score, it will likely take 30 days for a noticeable increase to be processed. 


Refrain from complaining about your stagnant credit score unless several months have passed.  Give the system 90 days to process your payments, bump up your credit score and ultimately set the stage for a mortgage approval, car loan or another line of credit.

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