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If you are seeking to take out an auto loan or buy a new home, you might be checking your credit score every other day leading up to your application to see where it stands. But only because you check it often does not mean there is going to be an update.

Credit scores refresh at various times throughout the month, and there might be times when it takes a bunch of days or weeks before your score updates. And even if you check it today and go to apply for a credit card or loan tomorrow, your score might change. If you are thinking about when does your credit score update, then you must read on. Here are when you can expect your scores to update and where you can check them for free:

How Often Does Your Credit Score Update?

There are three major credit bureaus: Equifax, TransUnion, and Experian. When your lenders report your credit activity and loan, your credit report gets updated with new information. But this is not done in real time. To ensure the date is valid, the bureaus go through a process. It can take anywhere from a couple of hours to a bunch of days. If there is an error or something that is looking out of place, then the bureau has to halt and verify the information before it shows on your file. This can prevent your report from being updated quickly. If you are wondering, “How often does credit karma update?” then lenders report information at least once a month. When the data is added to your report, it is most likely to give you a new credit score.  

When Did Credit Scores Start Going Down? Top 5 Reasons

Credit bureaus gather a massive amount of information regarding your credit accounts. Some examples include your payment history, reported balance, and credit limit. If you have any trouble using your credit card responsibly, then your report might also have negative items. Such items result in a change in your credit score (not in a good way).

At least there is good news regarding the delinquencies as well as other negative items. There are time limits for how long they will stay on your reports. After the time expires, they automatically drop off your credit report. Moreover, it can be a bit frustrating to hear, but after the initial two years, the negative impact on your scores begins decreasing. Let us take a clearer look at some of the most common factors individuals cannot wait to get off their credit reports:

Late Payments

Late payments are known to stay on your reports for up to seven years, beginning from the date of your missed payment. Bear in mind that you do not mostly get reported to the credit bureaus unless you are more than 30 days late for your payment. So, all you need to do is make payments on time so this does not happen to you. If you are concerned regarding “How often does Fico score update,” then the answer depends on the subscription you have. Basic one updates on a monthly basis. You can set up reminders to pay on time. Moreover, do not forget to focus on all of your bills. If you default on a phone bill, for example, it might also show up on your reports if the creditor decides to report it.

High Credit Utilization

You have a credit utilization ratio. It is the amount of credit you have used in contrast to the credit that you have available. If your ratio is higher than 30 percent, then it might lower your scores. In order to boost your credit score, try to keep your ratio below 10 percent. This might seem impossible. However, once you build a solid credit history, you will get high credit limits, and it will be easier to pull off.

Bankruptcies

This is a big one for a lot of people. A Chapter 7 bankruptcy tends to stay on your report for up to ten years. On the contrary, a Chapter 13 bankruptcy typically gets removed after seven years. A Chapter 7 bankruptcy will stay on your report a bit longer due to most of the debt being unpaid.

Hard Inquiries

Lenders can perform hard pulls or “hard inquiries” when you submit an application for financial products, such as loans or credit cards. These inquiries are official reviews of your credit report and can significantly decrease your score between zero and five points. Such an inquiry stays on your report for about two years, but it does not affect your score after a year or so.

Other Negative Items

Things including repossessions, collection accounts, foreclosures, and some lawsuits stay on your report for seven years. It is important to keep track of when the negative data is supposed to drop off your credit report. Errors happen, so you can ensure that the item does not stay on your credit report any longer than it has to. Keep in mind that after the initial two years, the effect on your score reduces. Meanwhile, pay all of your bills on time and practice good credit habits.

Now that you know how often is credit score updated, let us look into how often you should check your scores:

How Often Should You Review Your Credit Reports?

Since your scores are dependent on the contents of your credit report, you wish to make sure that your reports are free from any signs of fraud and errors. Bear in mind that you are entitled to a free credit report every week from each major credit bureau. You do not need to check them that often unless circumstances make you do so. For instance, if you have recently been a victim of identity theft or are going through a rocky divorce, you should keep an eye on your reports.

You can also review one of your three annual credit reports every three to four months. You can also seek help from credit monitoring services, such as Gifted Financial Services, to see your reports side by side. Keeping tabs open on your financial accounts by reviewing them weekly is also a great idea. Checking your reports helps you identify a scammer who has opened a new account under your name. However, monitoring accounts online enables you to determine fraudulent purchases in a jiffy so you can minimize the damage.

In A Nutshell

The answer to when do credit scores update depends on the information present in your credit scores – among various other factors. You cannot control how often they update. No matter if you are trying to improve or maintain your credit scores, it is vital to monitor your credit periodically. And Gifted Financial Services is one way to do that without hurting your scores. With time, monitoring your credit might give you a greater understanding of the factors impacting your scores. You will have a good idea of where you financially stand. With this information, you can take the next steps toward your financial goals.