Clearing your credit card debt is one of the fastest and surest ways to boost your credit score. Wiping out credit card debt and how soon those accounts reflect on your credit report have some bottlenecks, such as the lender and the credit reporting bureau. You may need to wait a few months to use your new and improved score to apply for credit.
Identification
The credit reporting bureaus usually take about a month to update a credit file. The bureaus, however, only report information from lenders, so when your creditor sends an update could delay a zero balance from appearing on your credit report. If he takes a month and a half to send new data, for example, it might take two or three months to show up.
Impact
The FICO scoring model offers no guarantees and often gives bizarre results, so clearing your credit card debt may have little or no impact on your credit score. Maxing out a card when you have a score of 680, for example, may cost as little as 10 points. Thus, if you only use a small amount of your credit--less than 35 to 50 percent--eliminating that debt likely has a minimal effect on your score.
Considerations
Not all lenders report to the national bureaus, especially mid- to small-size creditors. If your credit card provider does not subscribe to a credit reporting service, the account won't affect your credit. In rare circumstances, the card issuer may choose to report to only one or two bureaus.
Tip
Try to pay off your credit card balance as early in the month as possible, suggests Martha White in an article on the website Wallet Pop. Most lenders report statement on your latest bill as your balance. If your credit card statement displays a balance, your credit report probably has the same information. Your card may even allow you to make several payments during the month, so you could pay every two weeks instead of once a month.
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