The credit report is a statement that includes all of your credit account activities and debt conditions such as payment history, types of debts you have, credit balances, utilization percentages, etc. Every time your lenders and companies that manage your accounts report your credit information to major credit reporting bureaus, your credit report gets updated. How long does it take for a credit report to update? This article will walk you through the process of updating your credit report and how long it takes to get it updated.
The process of fixing your credit and improving your credit score is not simple and straightforward. If you recently paid off credit card balances, for example, you should expect your credit report to be updated with this new information within 30 days. In some cases, it can take up to 45 days before major credit bureaus update your credit report.
How Long Does it Take for a Credit Report to Update?
Your credit reports get updated whenever your lenders submit information regarding your credit accounts to credit reporting agencies. There are three major credit reporting bureaus:
- Equifax
- TransUnion, and
- Experian
Most lenders submit your credit information such as payment history, new accounts, utilization, foreclosures, bankruptcies, collection, etc. to all bureaus. Others report to a few bureaus or choose not to submit the information at all.
When your information is received by credit bureaus, your credit report will be updated. Your credit report is usually updated once a month or up to 45 days. Since your credit accounts come with different statement-ending cycles, your credit report gets updated as the major credit bureaus receive your credit information. In addition, lenders do not submit your information at the same time or same day. So, you should expect some delays before your credit report is updated.
If you paid off your credit balance and your credit report is not updated yet, it might take a little longer due to where and when your activities were submitted. Some bureaus update your information right away.
When are my credit scores updated?
Your credit scores change based on the changes made in your credit report. When credit reporting agencies receive your credit information from lenders, they update your credit reports. Any changes made in your credit reports could also result in changes to your credit scores. For example, if you pay off a large credit card balance, your lender will report your payment activities to major credit bureaus. Credit bureaus will then update your report and recalculate your credit score.
Depending on the nature of the information received, your credit score could also change. From the above example, a large payment will automatically lower your credit utilization. Since credit utilization affects your credit score by 30%, your credit score will go higher in response to reduced credit utilization.
The opposite could happen if you recently experienced a financial hardship such as a bankruptcy or foreclosure. This negative information will have a very negative impact on your score.
Why did my credit score drop?
Your credit score is a sensitive number that changes based on your credit account activities. If your credit score suddenly dropped, it is due to a recent negative activity reported on your credit report.
The following are reasons why your credit score dropped.
- Late or missed payment. Your payment history affects your credit score by 35%. If you recently had a late payment or missed one, you should expect your score to go lower. One missed payment can lower your credit score by 90 to 110 points. Always make your payments on time to keep your credit healthy.
- Your utilization rate went higher. Your credit utilization accounts for 30% of your credit score calculation. The utilization rate represents the amount you have spent compared to available credit. If your total credit limit is $1,000 and you spent $200, your credit usage is 20%($200/$1,000×100). Your credit score drops as your utilization goes higher. To keep your credit score higher always keep your utilization under 30%. The lower the better.
- You applied for new credit. When you apply for new credit, the lender requests to see your credit file. This results in a hard inquiry on your credit report. Hard inquiries lower your credit score by 5 to 6 points on average.
- You closed an account. Your credit age represents the average time your accounts have been opened. When you close an account, especially an old one such as a credit card account, you automatically lower your credit age. This activity drops your credit score.
- Your credit mix was changed. The credit mix represents the types of debts you have (revolving and non-revolving debts). For example, you can have credit cards, and loans. Your score could drop if you close an account or pay it off completely. This is because closing an account may affect your credit mix and result in a shorter credit history. Hence, lowering your score.
- Negative items have been reported on your report: If you have a foreclosure, bankruptcy, collections, and other negative items on your credit report, your credit score will suddenly drop by a lot.
What is rapid rescoring?
There are times when you can have an influence on when your credit report gets updated. This method is known as rapid rescoring and it works with the help of your lender. If you want to get a mortgage or a loan, but recent activities are not on your credit report yet, lenders can request credit reporting bureaus to add new account activities to your report.
For example, if you recently made a positive change to your credit accounts, and cleared negative items or errors from it, your lender can request that the new information be added to your credit report.
New positive information on your report will improve your credit score, which in the end boosts your creditworthiness. An improved credit rating will also help you secure a lower interest rate.
Keep in mind that rapid rescoring can only be done by your lenders on your behalf and there might be a fee for this service.
