How Often Are Credit Payoffs Reported?

Your credit score is based upon the information contained within your credit report. According to FICO, thirty percent of your FICO score measures how much debt you have. Generally, the less debt you owe, the higher your score will be, so paying off accounts may improve your credit. If you've paid off a credit account, it's helpful to understand when this payoff will appear on your credit report.

Credit reporting

The exact date that each creditor reports each month will vary based upon the chosen reporting dates for that particular creditor but creditors generally update information to credit bureaus in 30-day increments. These updates include the status of the account, meaning whether it's paid on time or late, and the balance on the account. If you paid off a credit account, that zero balance will appear on your credit report the next time that creditor updates its data with the credit bureau.

Free reports

If you've paid off a credit account, it's important to ensure that it reports correctly on your credit report. Order a copy of your credit report thirty days after the payoff to ensure the balance is accurate. The Fair and Accurate Credit Transactions Act gives consumers the right to order one free report per year from each of the three main bureaus: Equifax, Experian and TransUnion. Visit the AnnualCreditReport.com website to request the free reports online. The site also gives you information on how to order the reports by mail or phone, if you prefer.

Disputes

After receiving your credit report, if the balance on a paid off account is incorrect, the Fair Credit Reporting Act gives you the right to dispute that error with the credit bureaus. Credit disputes are filed online at the bureau's website, by phone with a customer service representative or by mail. The bureau has up to 30 days from the date it receives your report to investigate your claim and make corrections. Under the FCRA, the bureau is required to send you written results of the investigation and an updated copy of your credit report.

Warning

Paying off a credit account will not remove it from your credit report. Under the Fair Credit Reporting Act, negative account information can remain on your report for up to seven years. Positive account information can remain on the report for up to ten years. Avoid companies that promise to remove items from your report. This could be a scam, according to the Federal Trade Commission. Credit bureaus are not required to remove accurate credit information from a report, even if that information is negative.

References

• myFICO: What's In Your FICO Score
• myFICO: What Are The Different Categories of Late Payments and How Does Your FICO Score Consider Late Payments?
• Federal Trade Commission: Your Access To Free Credit Reports
• Federal Trade Commission: How to Dispute Credit Report Errors
• Equifax: Length of Credit History
• Federal Trade Commission: Credit Repair

Resources

• myFICO: What's In Your Credit Report