Perhaps you’ve been working hard on getting your credit back in shape and are anxious to see how your efforts are paying off with positive changes to your credit report. Unfortunately, there’s no instant gratification when it comes to reporting, and any revisions — even good ones — will take time to appear.
Here’s what you can expect when it comes to the reporting of financial activity on your credit history.
Credit Reports Are Updated Frequently
If you think today’s credit report will be identical to last month’s report, you’re not exactly correct. In fact, reports can be updated as periodically as every 24 hours.
This is why two different potential lenders can come with a completely different response to your credit application. Depending on the day they choose to pull your credit history, you may appear to have two slightly different histories. If anything has changed from one day to the next, your report could reflect that change.
Lenders Vary Their Reporting Times
Even though the reporting agencies update their histories daily, they may not have new information to report when you ask for it.
That’s because lenders have their own internal processing for sending data to the reporting agencies. A loan taken out just two weeks ago is not likely to have been reported yet; a resolved debt may still appear on your history as delinquent, even though you’ve paid it recently.
So while the credit reporting agencies have the capability to give updated info at any time, they are dependent on the banks to tell them what to share, and that could take time (30 to 45 days for each new activity on average).
Information Gets Taken Off, Too
Many of us think of new information when we talk about waiting for updates to our reports, but information can also fall off a report, especially when it involves info that is required to be deleted due to state or federal law.
For example, bankruptcies will hang around on a credit report for seven years, and then they’ll be removed without requiring any action from the consumer. If you know a detail will age out soon, keep your eye on your report to ensure it happens in a timely manner, and be sure that you wait until after the update to try for that new loan.
Advice for the Future
Since it may seem that a consumer won’t know exactly when any given piece of information will appear or disappear from a credit report, and the perfect “snapshot” can be the difference between getting that loan or job or not, it’s best to plan ahead for the most favorable report possible.
If you are going to apply for a loan, start pulling your reports from the three agencies at least three months in advance. You may choose to start with one agency, follow up with, or correct any info that seems out of place, and then move on to the other agencies.
It’s also recommended that you don’t do anything drastic if you are looking to achieve a clean report down the road. That means no new lines of credit opened unless absolutely necessary, and all payments to lenders should be made as promised 100 percent of the time.
A little careful planning and an understanding of how reporting really works can help ensure your credit history is there to support your dreams when you need it.
Photo credits: poorstudentblog.com