How Often is Your Credit Score Updated?

Credit Score Update
"When it comes to credit score, discipline and patience is the key to achieve good numbers, you may be impatient to see instant improvements but It’s a long waiting game."

Assuming you’re in the green when it comes to paying your bills, your credit score will rise over the years.

There’s not much you can do to accelerate de process unless you decide to pay a large chunk of debt upfront.

If that’s not the case, there are certain behaviors or actions that will give you a solid base to steadily grow your score over time.

What is a Credit Score?

If you are being introduced to the concept, credit scores work as a mechanism for financial institutions to check the likelihood of the borrower (you) repaying the owed amount to the lender (the institution) under the negotiated terms, it’s a number between 300-850 which is attributed individually based on:

   > Credit history

   > Bill payment history

   > Amount in debt

   > Types of credit

   > Number of credit Inquiries

   > Used balance vs. Available balance

Coming as no surprise, the place you fall into in between these numbers will directly affect the way financial institutions “see you”, the higher your credit score is, the more likely they are to lend you the requested amount under the best conditions they have to offer and the higher your negotiation power becomes.

If you already know your credit score but don’t know if it’s good or bad, take a look at the following graphic, this is how it works, according to FICO:

How Often do Credit Scores Update?

There is no specific date, however, you can expect it to be between 30 to 45 days without your intervention.

In order for your credit score to be updated, your creditors have to constantly send updated information to the 3 main credit bureaus.

Consumer credit information is sent from creditors to bureaus for a fee and that same information is sold back to businesses that grant credit or to the consumer upon request.

The main 3 Credit Bureaus in the US are:

Experian

   > Headquarters – Dublin, Ireland

   > CEO Brian Cassin

   > Revenue 179 billion USD in 2019

   > Number of Customers 235 million individual US customers / more than 25 million US businesses

   > Number of employees  17 800

Equifax

   > Headquarters Atlanta, Geórgia, US

   > CEO Mark Begor

   > Revenue 3.508 billion USD in 2019

   > Number of Customers 800 million individual / 88 million businesses

   > Number of employees – 11 200

Transunion

   > Headquarters – Chicago, Illinois, US

   > CEO – Chris Cartwright

   > Revenue – 2.656 billion USD in 2019

   > Number of Customers – one billion individual / 65,000 businesses

   > Number of employees – 8 000

How Often do Creditors Report to Bureaus?

It depends on your creditor, most will report by the date they issue your charges for the recent billing cycle.

This is commonly a monthly practice but not a precise or disclosed to the public one, the date could be anywhere from the beginning to the end of the month, depending on the creditor you are working with or your billing cycle date.

Legally speaking, creditors are not obliged to report to bureaus, it’s a voluntary practice.

Some will report to all 3 main bureaus but most will only report to one or two, once again, it depends on the creditor you are working with.

If raising your credit score is important, make sure you are working with a creditor that reports to all 3 main bureaus.

How Long Until Bureau Information is Updated?

Bureaus are known to update your information as soon as they receive it, credit score updates happen in an oscillating way, your information is constantly being updated or deleted, it could change daily or more than once in a day.

Why is Your Credit Score Not Shown in Credit Reports?

Credit score and credit reports are two different products.

A credit report is a record of your credit history, this typically includes details of past payments and outstanding balances.

Credit score is the number that creditors will use to evaluate you both as a safe customer or a risky one.

FICO score is the number one credit score provider in the US, followed by VantageScore.

FICO was founded in 1956 by engineer Bill Fair and mathematician Earl Isaac, with an initial investment of 400$ each.

Two years later, in 1958, its first credit score model was built.

FICO went public in 1986 and it’s now used in around 90% of lending decisions.

VantageScore model is the result of a partnership between the 3 main bureaus (Experian, Equifax, and Transunion), it’s in existence since 2006 and it has gained traction since then.

If you’re applying for any type of credit, it’s good practice to use both credit score providers since it’s highly unlikely you’ll know which one your lender will use to gather information from your credit score.

What if You Need Your Credit Score Updated as soon as Possible?

If you just paid off a large amount of debt in order to apply for a large loan, mortgage, or any other type of credit, chances are that it will take a full billing cycle for your credit score to update, however, you need this payment to be reflected in your credit score as soon as possible in order to have your request accepted under the best conditions possible, even a few numbers up in your credit score can make a big difference and save you tens of thousands of dollars in the long run, makes sense.

In this case, you can use rapid rescoring to make an urgent update.

Rapid Rescoring

Rapid rescoring is a process in which your creditor reports proof of sudden changes to the bureaus, changes there are not yet reflected on your credit report.

In this case, your creditor will pay a fee to have the information updated as fast as possible or within a chosen time frame.

Once updated, a new request of credit scores will reflect the changes, typically resulting in a higher score.

This service is only possible through your creditor, you cannot request a rapid rescore on your own.

How Much Does Rapid Rescoring Cost?

The price of this service typically ranges anywhere between 20$ and 100$.

The good news is that your creditor will not charge you directly for it but you will eventually end up paying it somewhere else, most likely in loan-related fees.

What Positively Affects Your Credit Score?

The better your scores are to start with, the more difficult it is to improve them.

Creditors will assess your ability to manage credit and pay on time, it could take a while to build a good score but in the meanwhile, these are good practices:

   > Keep a low credit balance – The ideal is to be using less than 30% of available credit, this is an indicator that creditors are working with a responsible customer.

   > Make payments on time – This shows that you are good at honoring your commitments, you will only gather benefits from this practice in the long run.

   > Register to vote – It improves your chances of qualifying for credit as your identity will be easily confirmed, creditors see it as a positive sign.

   > Settle outstanding debt – It’s good to show your creditor that you’re not just living off credit, the other positive side is one less bill to pay every time you manage to settle any source debt.

   > Long and clean credit record – A record without negative indicators is the ultimate statement you can have, this shows that you only borrow what you can repay and don’t have any signs of past risky behavior, so the probability of it happening in the future is low, creditors love this.

Final Thoughts

Credit score can be the difference between a good loan and a bad one.

Making sure to always pay the bills on time in order to maintain a good relationship with creditors is the most important factor to fall on the good side of the equation.

Even so, being an exemplar borrower doesn’t translate to positive oscillations in your credit score in short periods of time.

The average credit score by age is as follows, according to FICO:

It takes years of discipline but hey, every successful model of business is constantly evolving, chances are that the rules that are applied now won’t remain untouched further in time.

 

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