Credit Reports Change Continuously
Credit Reports Change Continuously
Many consumers think that a credit report is a static document that is occasionally updated and changed for better or worse. Credit reports change continuously in reality. As a matter of fact there is really no credit report waiting in some file cabinet at the credit reporting agency. Nothing happens until an order is placed for someone to pull it! When it is pulled it will show a freeze frame of how your accounts stand at that moment in time. Paying down balances on credit cards is the number one tactic to showing very fast improvement in your score. Doing this properly is an art.
When New Information Comes In Credit Reports Change Continuously
Your credit report could be different if pulled within a minute from now and different again two minutes from now. Information that may be negative or positive is constantly flowing into and out of the databases at the major credit bureaus. The major credit bureaus are Equifax, Experian and Trans Union. As the new information is provided the databases are constantly altered. This doesn’t mean that each purchase you make is instantly transferable to your file. The lender must provide the credit bureau with the information. The statement closing date is what is reported each month. Make sure your lender reports to all 3 major credit reporting agencies.
Lenders don’t update it all at the same time
Your monthly credit card statement will give you a good example of how credit reports change continuously. The “cut” date each month is the date on which your statement is closed out. This balance is what is reported to the credit reporting agency. The easiest way to game your credit score in the short term is to pay your credit cards off just before the closing date so that a low or zero balance is reported. This increases your very important category of ratio of debt to available credit. Not all monthly reports are sent in to the credit reporting agency on the exact date on which the statement closes. Lenders don’t update them all at the same time. The actual reporting date may vary from the cut date. The cut date is usually 3-5 days after the due date. Any charge made during this interim time frame will show on the amount reported to the credit reporting agencies.
Deletions Also From Credit Reports Change Continuously
As negative information ages out of reporting time it is purged from your record. For most items this is done after 7 years. This is supposed to be done automatically but you should watch your reports closely to make sure. It is not possible to control the exact timing with precision of just how credit reports change continuously. Be pro-active by frequently checking your reports. It bears repeating that self checking does not ding your score. Don’t wait until you are close to applying for a home mortgage or auto loan. Getting to that top notch credit score requires vigilance.
Always Take the Long View
Understandably I and other credit counselors are always asked how long it will take to effect meaningful change in a credit report. No one likes to hear “it depends” but the truth is a credit score is calculated from a lot of constantly changing parts. Plan on 30-45 days or more for your new information to be assimilated by the system. The fact that credit reports change continuously means that time is on your side. If you find yourself in a position where you need to improve as fast as possible pay down the next credit card that is due as much as you can. When the new statement is reported it will change your debt to available credit ratio by as much extra as you paid. This has an immediate effect on your credit score. Think long term as much as possible so you don’t have to depend on hoow promptly new information is reported.