When is your credit score updated? The short answer is: it varies. A credit report is a detailed account of your credit history that describes how you are able to handle and repay borrowed money. The three main credit bureaus that maintain this information are Equifax, Experian, and Trans Union. Credit scores are typically calculated based on multiple factors such as payment history, credit inquiries, and amount borrowed. If you have made your monthly payments on time, paid off a loan, or removed a negative account from your credit report, this can cause your score to rise. If you missed a payment, applied for too many new lines of credit, or had an account sent to collections, this can drastically lower your score. However, the time that it takes a lender to report to the credit bureaus can also affect your credit score. Check out where your current credit score stands:
How Often Are Credit Scores Updates?
Typically, your credit score is updated every 30 days, but, this largely depends on the creditor and how often they report your information to the credit bureaus. Lenders generally report both negative and positive information to at least one of the credit bureaus on a monthly basis. Creditors generally report information such as account activity, account balance, payment history, and credit inquiries to the bureaus. Some lenders may only report to one or two of the bureaus. Other lenders, such as large banks and major credit cards, typically report to all three credit bureaus. Each lender decides which and how many bureaus they want to report to. This can lead to a slight fluctuation of your credit score between all three bureaus.
Your credit report is a living, breathing document and is being updated constantly. Credit bureaus handle millions of credit reports on a daily basis. Old accounts are removed, new information is received, and account details are updated. So what happens when a lender reports your account information to the credit bureau? Lenders are not required to report your account information to a credit bureau. However, it is usually in the lenders best interest to report account information as it provides them with a tool to gauge a consumers’ creditworthiness. You might find that some smaller loan companies may only report to one credit bureau on a monthly basis. Larger banks that normally provide larger loans, typically report to multiple bureaus on a monthly basis, or whenever there is a change in your account history.
When Does a Lender Report to the Credit Bureaus?
Once a lender reports to the credit bureau, updates generally happen very quickly. Updates are reflected on your credit report typically within two or three days from the bureau receiving the updated information. Once this information is added to your credit report, your score is recalculated immediately. Checking your credit score on a regular basis provides many benefits to you, the consumer. Viewing your score can provide you with an accurate snapshot of your credit history, help you to determine your chances of being approved for a new line of credit, or even alert you to any mistakes that may have been reported to the bureaus incorrectly.
How Often Is Credit Updated?
Credit scores do not change on a daily basis. Your credit score is not calculated until it is requested by you or a lender. The score that is calculated at that moment represents your credit standing at that point in time. Since credit reports are constantly updated, if your score is requested again after an update has been made, the score could be very different from what it was previously. However, the ability to update your credit score is dependent upon how often creditors are reporting your account information to the bureaus. Consumers can check their credit scores daily, but if their lenders have not updated any new information, the score will remain the same.
So let’s say that you have worked very hard over the last few months to improve your credit score by paying off a substantial amount of debt and you have just found your dream home. Desperate to get the lowest rate possible, you eagerly check your credit score only to find that it still has not been updated with your most recent credit improvements. You don’t want to miss out on the opportunity to purchase your dream home, so what can you, as the consumer do to speed up the process? Rapid rescoring might be the answer to your dilemma. With this process, you would provide your prospective lender with proof that a re-score would make a great difference in your credit score. Then the lender can then request that the credit bureau provide this rapid rescore service for a fee that has to be paid in advance. Rapid rescoring can only be requested by a lender and not a consumer.
There are many tools available that will help you simulate your new credit score based on different changes. Using the an online tool, you can calculate how much your credit score would change if you missed a payment, paid off or obtained a new loan, increased your credit limit, or had an account sent to collections.