While keeping an eye on your credit, you may have realized that a decline in your credit card balance will generally not immediately affect your credit, nor will any growing balances on your credit cards. Not having a bill change soon after paying off your credit card balance can be frustrating if you’re trying to improve your credit, or it can be a relief if your balance is high enough to affect your credit score.
The reason payments or increases in your credit card balance don’t immediately affect your credit score is because credit card companies typically only report to credit bureaus at certain times during the month. As such, it can be helpful to understand when credit card balances are reported and when credit reports are updated. If you’re wondering when credit card companies report to credit bureaus and how the timing can affect your credit score, we’ve got the answers to your questions below.
When do credit card issuers report to credit bureaus?
So, when do credit card issuers report data to credit bureaus? Depends. There is no specific day of the month when each card issuer reports cardholder data to the credit bureaus. However, Experian says card issuers typically release cardholder data at the end of each billing cycle.
In fact, according to Experian, each lender reports to the bureau on a different schedule, and this usually happens every 30 to 45 days. To complicate matters further, lenders rarely send reports to all three bureaus – Experian, Equifax and TransUnion – on the same day. This means that the credit card usage information on your credit reports may differ, which is one of the reasons your three credit scores don’t match.
Your credit card issuer may report your credit card to the credit bureau at the end of the billing cycle or at another date. He may report to each bureau at the same time, or have a different schedule for each of them.
However, it is important to note that late payments are only reported if you are at least 30 days past due. This means that your late payment will not appear on your credit report unless it reaches the 30-day mark. If so, you can expect it to appear on your credit report within a month or two.
Another thing to keep in mind is that not all creditors report to the bureau, as issuers are not legally required to do so. For example, some smaller creditors may not report to all three bureaus, or not to any of them at all. If your goal is to improve your credit, make sure you work with a credit card issuer who will share your information with each bureau.
How often are credit reports and scores updated?
So, when does your credit card issuer send information to the credit bureau, when does it appear on your credit report? Generally, you can expect this information to be added to your credit report as soon as the bureau receives it. According to TransUnion, “When credit reporting agencies receive information from your creditors, it is usually added to your credit reports right away.”
But while your credit scores are calculated based on the data on your report every time a lender requests it, you probably shouldn’t expect drastic changes every time your credit issuer reports your last payment. Building credit can be a lengthy process and it takes patience. But if you pay on time every time, you will see results in the long run.
Late payments, on the other hand, are a different story. Whenever a late payment appears on your credit file, it can immediately and significantly damage your credit history. The longer a debt remains unpaid, the more damage it can do to your scores.
Why time matters
The timing of your payments is important from a reporting standpoint. Let’s say you made a large purchase with a credit card that almost reached your credit limit, but paid it off right before the due date. However, when you check your credit, you see that the issuer reported a high balance in your card account before the payment was made because your issuer reported your current balance on the issue date (the day your billing cycle ended). In turn, your credit score goes down.
The reason your score went down in this hypothetical scenario is due to the high credit utilization rate, which is the balance on your credit card compared to the card’s credit limit. This ratio is expressed as a percentage and is considered the second most important factor in assessing creditworthiness after payment history.
It is generally recommended to use less than 30 percent of your loan to avoid damaging your credit history. Ideally, you want this ratio to be in single digits.
The other scenario is that if you make the same large purchase, but instead of letting that large outstanding balance carry over to your statement to become your statement balance, you pay off most of your current balance before the statement date. . So when your credit card issuer reports your details at the end of a billing cycle, they will only report the unpaid balance you have left after payment. In this situation, your credit usage will be relatively low. In turn, your credit score will most likely not get worse because of your major purchase.
As you can see, the timing of your payments and the timing of credit card companies reporting bureau balances can greatly affect your credit utilization rate. Keep in mind that sudden changes in credit usage can affect your credit score immediately—and significantly. For example, if you didn’t have a lot of credit card debt and then suddenly run out of credit cards, your results could suffer. On the other hand, if your credit issuer has reported that you have paid off most of your debt, you may see immediate positive results.
Monitor your credit usage to make sure that whenever your credit card issuer reports to the credit bureaus, your credit usage will not negatively impact your scores. If you can’t pay off the balance right away, try making several smaller payments over the course of the month to keep the ratio as low as possible at all times.
Bottom line
All credit card companies report to credit bureaus differently. Your credit card issuer may notify credit bureaus of your credit card transactions at the end of the billing cycle or on another date. And he can report to each bureau at the same time or have a different reporting schedule to each of them.
Not having a clear answer about when your credit card company reports to the bureau can be frustrating, especially if you’re trying to improve your credit score and keep credit usage low. However, keeping your balance as small as possible and making every payment on time can help your creditworthiness, regardless of your issuer’s reporting schedule.
Editorial disclaimer
The editorial content on this page is based solely on the objective judgment of our contributors and is not based on advertising. It was not provided or ordered by credit card issuers. However, we may receive compensation when you click on links to our partners’ products.
