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Your credit scores are based on the current contents of your credit reports, so they can change or update fairly often — whenever something changes on your credit reports. Credit scores are newly recalculated every time you or a lender request a score.
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Working to improve your credit is a wise use of your time. But when you’re trying to boost your credit scores because you want to qualify for something specific, like a credit card or a car loan, the process can feel like it drags on forever.
How soon will the actions you’re taking change your credit scores? The answer to that question is a little complicated.
First, credit scores don’t technically change. Confused? Don’t worry, I’ll explain more below.
Here’s the good news. If you take the right credit improvement steps, you could potentially see higher credit scores the next time your credit reports update.
Let’s talk about what most people really want to know when they ask the question, “How often do credit scores update?”
You’ve been working hard to improve your credit scores. How long will it take for your credit improvement efforts to pay off?
There are many variables that can affect the answer to that question. To keep the answer as simple as possible, I’ll just say the following. It’s often possible to earn a higher credit score in 30 days or less.
It’s important to understand that the accounts on your credit reports don’t update in real time. The credit card balances on your credit reports, for example, won’t move up or down as you make charges or pay your bill. Instead, your credit card company will update the credit bureaus once a month with your new account details, as they appear on your statement.
You have hundreds of credit scores, not just one. The credit scoring model a lender uses to evaluate your credit report has a big affect on the credit score you receive.
Here’s a scenario that might make the credit scoring process easier to understand. Imagine the following.
Jenny applies for a mortgage to buy a home, but her middle FICO Score is 40 points too low to qualify. Determined to overcome this roadblock, Jenny reviews her three credit reports (always a wise move before applying for a loan or credit card). She researches ways she can try to improve her credit scores.
Jenny learns that paying down credit card balances to lower her revolving utilization ratio might help her scores. So, she pays off two credit cards and reduces the balance on a third account to less than 30% of its credit limit.
Excited to see results, Jenny uses a credit monitoring service to check her credit scores. Although the VantageScore credit scores she checks don’t match the FICO Scores her mortgage lender uses, it’s still a good way to see if her scores are moving up or down.
When Jenny checks her credit, she’s surprised to see her credit card balances didn’t update right away. Since her credit card companies haven’t updated her balances with the credit bureaus and nothing else on her reports has changed, her credit scores are still the same.
Jenny continues to check her credit scores. Over the next 30 days, all three credit card companies update her account details with the credit bureaus. With each update, her credit scores improve slightly. After the final update, her VantageScore credit scores are 50 points higher than they were at the beginning of her journey.
She goes back to the loan officer and he recalculates her three FICO Scores, based on her current credit reports. Her middle score is 43 points higher than it was a little over a month ago. Jenny now qualifies for a mortgage.
(The scenario above, of course, is made up. You shouldn’t expect to duplicate the exact results above, even if you follow in Jenny’s hypothetical footsteps.)
Credit reports and credit scores play an important role in your financial life. But while similar, these two products serve different purposes.
Credit reports show your credit history. They feature information about your current and closed credit accounts such as credit cards, mortgages, auto loans, personal loans, student loans, credit inquiries, and more.
Credit scores, like those created by FICO and VantageScore, are not part of your credit reports from Equifax, TransUnion, and Experian. Instead, a credit score is an add-on product that lenders can purchase to evaluate your credit history and assess your creditworthiness.
Because credit reports and credit scores are separate products, it’s possible to get a copy of your credit reports without your scores attached. For example, you can visit AnnualCreditReport.com once every 12 months to get a free credit report from each of the major credit bureaus. Free credit scores, however, aren’t part of the package. The Fair Credit Reporting Act only gives you the right to access free annual reports.Read more How to Check Your Free FICO Score (and Every Other Free Credit Score) in Under 5 Minutes
First, the accounts on your credit reports are constantly growing older. There are many other reasons a credit reporting agency might update your credit report as well, such as:
As the details on your credit reports change, it can absolutely impact your credit scores. However, the credit scoring process might not work in the way you thought.
Your credit scores are not constantly in flux behind the scenes. They are only generated when someone requests them — like yourself or a lender.
A credit score is an evaluation of your credit risk at a specific point in time.
A credit risk score tells a lender how likely you are to pay a bill 90+ days late within the next 24 months. That risk evaluation is based on the information that appears on your credit report at the moment your score is calculated.
If the information on your credit report has changed, you’ll probably see a different number the next time you purchase a credit score (or access a free credit score online). But that doesn’t mean your credit score “changed,” per se. Rather, a new score is calculated (upon request) based on your current level of risk.
You may also find it interesting to learn that your scores aren’t stored anywhere on your credit reports. You can consider each credit score a still frame — generated once, then forgotten.
Many people use free online services to track their credit scores. Credit Karma and Capital One’s CreditWise are two examples of websites that offer free credit scores to consumers.
If you use a free credit monitoring service, you may wonder how soon you can access a new credit score online. The answer depends on where you are tracking your credit scores. Some websites, like Credit Karma, will allow you to get an updated credit score each day. Other services may only offer you a new credit score once a month.
Paid credit monitoring services may allow you to access scores for all three of your credit reports at once. However, there are typically still limitations on how often you can view a recalculated version of your score. Often, a credit score update is limited to once per month through these services.
There are no guarantees when it comes to credit score improvement. Yet if you take certain credit-smart actions, like the ones below, there’s a chance your credit scores may be in better shape the next time your credit reports update.
Paying down credit card balances is an actionable way to potentially raise credit scores. FICO bases 30% of your score on factors pertaining to the amount of money you owe to creditors on your credit report. Your credit card utilization rate (aka your balance-to-credit limit relationship) has a big influence over this credit score category.
When you lower your credit card balances, your scores are likely to benefit. But you’ll have to wait until the next time your card issuer updates your account with the credit bureaus to find out if your strategy worked. At the worst, paying down credit card debt can save money in interest fees. So, it’s a low-risk move, even if you don’t see the improvement you hope for when you recalculate your credit scores.
Asking for a credit limit increase on a credit card is another way to possibly boost your credit scores. The more room you have between your credit card balance and your account limit, the lower your credit utilization ratio will fall. That’s good from a credit scoring perspective.
Even if a card issuer approves your request for a credit limit increase, you won’t earn a higher credit score automatically. You’ll have to wait for the card issuer to update your account information with the new credit limit. Then you can request a new credit score to see if there’s been any improvement.
Debt consolidation is another way to lower your credit card utilization when you can’t afford to pay off your balances. Two of the approaches you can take here include:
In either scenario, you open a new account and use it to pay off existing credit card balances. Once the debt moves from your old credit cards to your new account and your credit reports update, your revolving utilization rate will likely fall. (In the case of personal loans, utilization could go all the way to 0% if you use the funds from your new installment account to pay off all of your revolving credit cards.)
There are other steps you can take to possibly earn higher credit scores too.
The information on your credit reports is constantly changing. So it’s not uncommon to see fluctuations each time you review your credit scores, even if you use the same credit scoring model to recalculate them. In fact, you could check your credit scores in the morning and the evening of the same day and you might not get the same results.
As always, your best bet is to focus on the source of your scores — the details of your credit reports themselves. When you follow good credit habits, like paying on time and keeping your credit card utilization low, your credit scores should benefit.
Good credit scores can help you tap into a lot of perks, like lower interest rates, better credit cards, and better approval odds when you apply for financing. So, even if you have to wait to see the results of your credit improvement attempts, it’s worth it.
Michelle Black is a leading credit expert, author, writer, and speaker with over a decade and a half of experience in the credit industry. She is an expert in credit reporting, credit scoring, financing (mortgages, credit cards, loans), debt eradication, budgeting, saving, and identity theft. She is featured monthly at credit seminars, podcasts, and in print. You can connect with Michelle on Twitter (@MichelleLBlack) and Instagram (@CreditWriter).
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