The emails usually come in the form of a slightly panicked plea, “How long will it take my credit report to be updated after I pay off a credit card/settle a collection account/get the IRS to remove a tax lien etc?” The writers of those emails will usually go on to explain that they are trying to get a mortgage, auto loan, or some other type of loan, and want to make sure their latest credit report information is considered.
So how often do credit reports change? Like so many things in life, your credit report can change in the blink of an eye.
“Right now it’s 11:40 my time,” said Rod Griffin, director of public relations for Experian, when I interviewed him for this story. “Let’s say a lender requested your credit report right now. If you apply for credit (again) in an hour your credit report could be different,” he says, referring to the inquiry that would have been generated when the first lender accessed my credit information.
“Credit reports can change as often as every day if there is new information provided to the credit bureaus,” says Barry Paperno, community director for Credit.com.
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If you want to be technical about it, you don’t really have a credit report on file with the credit reporting agencies to begin with. Explains Griffin: “We have information from each of the lenders, and we go out to our databases and compile information from those databases when a credit report is requested. Your credit report represents a snapshot of your credit history at any given point in time.”
That means that the information is available in the credit reporting agencies’ (CRAs) databases at the time a credit report is requested is the information that will be reported. “You don’t have a credit report until you apply for credit and it’s requested,” Griffin says.
But it’s not like checking your online bank account and seeing the debit card purchase you made a few minutes ago in your running balance. “It’s not real time,” says Griffin.
While lenders often supply information to the CRAs on a daily basis, that doesn’t mean your account information is updated that frequently. “Lenders may have millions of customers and they don’t update all of their information at the same time,” Griffin points out. He goes onto add that many lenders report account information around the close of the customer’s billing cycle.
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But it’s not just information that is added to credit reports that cause them to change. Information also is removed or suppressed in the CRAs’ databases. Certain types of credit information must be removed when required under federal or state law, for example. “We’re also constantly tracking dates in case information needs to be removed because it’s too old. For example Chapter 13 bankruptcy will automatically be removed seven years from the filing date,” Griffin says. You don’t have to ask the CRAs to remove information that should no longer be report. It should happen automatically.
And just as credit reports can change at any time, so can credit scores. There’s a common perception that a “credit score is calculated, stored on a shelf somewhere, and changed periodically,” says Paperno. Instead, it is calculated when it is requested, based on the information from a CRA that is available at that time.
Does this change how you should view your credit report? Not really. You’ll still want to make sure you stay on top of your credit information so you can challenge mistakes if necessary. To do that:
Check your credit reports. At least once a year, visit AnnualCreditReport.com to get your reports and check that they are accurate and complete. (You can also get your credit score and a snapshot of your credit report for free from Credit.com’s Credit Report Card.)
Give yourself time. Check your reports 3-6 months before applying for a major loan like a mortgage or auto loan, recommends Griffin. That will give you time for your credit report to be corrected and updated if you do find mistakes.
Be patient. It may take 30-45 days or so for updated information to appear on credit reports requested by you or a lender, due to the reporting process. If you’ve recently paid off a credit card with a high balance, for example, it may take a little time to see the lower balance reported.
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