Information on Paying Off Credit Card Debt and Credit Score

Submitted by kim09 on Tue, 10/13/2009 - 17:29

We have recently paid off some credit card debt. How long will it take to effect (positively) our credit report and how positively will it effect it? (It was about $30K in Credit Cards - total). Thanks

Hi Kim,

Congratulations!! You have paid off your debts. It will definitely affect your credit report and score positively. However, it takes a little time for your credit report to get updated and reflect all the changes. You have to wait for at least 3 months to find out the changes in your credit report. However, the time of updating reports is not universal. It depends on the respective credit bureaus. It is not possible to say the exact points by which your score will improve, but it will go up by considerable number of points.

Wed, 10/14/2009 - 06:26 Permalink

Generally the credit reporting cycle is 90 days.So even if they update your record within 14 days, it is likely that it will not show up on your credit report until the next cycle. Many of the larger banks and finance companies report updated information to the credit bureaus every month.

Wed, 10/21/2009 - 17:12 Permalink

Your credit rating is calculated based on several variables, including:

1) Payment history, which counts for approximately 35% of your score, is the most heavily weighted factor used in calculating your credit score. Consistently paying your bills on time has a positive influence on your score, while late or missed payments will hurt you in this area.

2) Total debt and total available credit, which counts for about 30%. This section looks at how much debt you have compared to the total available credit on your accounts.

3) Length of positive credit history, which counts for about 15%. The longer you maintain accounts in good standing, the better your score will be. This shows that you are able to make a long-term commitment to a creditor and are consistently responsible about making your payments.

4) Mix of types of credit, which counts for approximately 10%. Having several different types of credit, such a credit cards, consumer loans, and secured debt, will have a positive influence on your credit score. Having too much of one type of credit can have a negative impact.

5) The number of new credit applications you have recently completed, which accounts for about 10% of your score.

Wed, 10/21/2009 - 17:16 Permalink