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After I pay my credit card balance, how long until my credit score increases?

I got my first credit card in January to build up my credit score. I’ve used it a handful of times and have always paid the balance within a few days after using it, even before my due date. I messed up though and didn’t realize that there is a difference between my payment due date and my billing statement dates. So I used my card on March 14th for $296 and paid in full on March 17th. My payment due date is April 12th. But the billing cycle was February 16-March 15. I thought that Capital One would report to the credit bureau on my payment due date. But they reported an increase in debt on March 14th, even though my bill wouldn't have been due until April 12th. So because of that, my score went down 42 points!! I’m looking to buy a house and this changed my score from “good” to “fair” now.

So my question is, when they report again on April 14th and it shows I have a zero balance, will my score go back up right away?

Also, it says that I’m using 30% of credit limit of $1000, and apparently that affects my score too. But technically I’m still under 30% at $296. I’m so confused!

6 Answers

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  • DEBS
    Lv 7
    2 months ago
    Favourite answer

    You're right debt is reported once a month and that isn't lined up with your due or statement dates.  The utilization portion of your credit score uses that reported number until they report another number.  The good thing is, unlike a 30 day late payment, the utilization doesn't stick around if you have it corrected for the next time they report.  Pay off your card and use much less (or not at all) in the 30 days or so prior to getting your mortgage.  That way you won't get any surprises.

    As for your utilization, there is no hard line to stay under.  The lower your utilization, the better your score.  One stat I found says that, on average, a person with a score around 800 has a utilization of about 7%.  Utilization is also not standalone. If you otherwise don't have bad marks, then having a little bit high utilization will not kill your score.  If you have several 30 day lates, for example, then a higher utilization rate can hurt your score more than it otherwise would.

    Each agency does things a little different.  Nobody truly understands the exact formula and how to win at it; just how to do better.  Fretting over short term drops is going to drive you insane.  Working on a good score in the long run is best.  As mentioned, if you have a big purchase coming, then make sure you have everything lined up 30+ days in advance.

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  • Anonymous
    2 months ago

    Capital One uses Transunion Credit Bureau.  I have noticed the same thing in my dealings with Capital One.  An increase in credit card debt shows almost immediately (percentage of credit used) but paying down that debt which decreases your percentage doesn't show up for two to three months.  Of the credit reporting bureaus, Transunion is the worst, Experian is better but not by much, and Equifax is probably the best of the bunch.  A mortgage banker will probably not be looking at the same report that you are since a mortgage banker will be looking more at credit stability than periodic fluctuations in usage.  If you do look for a mortgage loan make sure it is a "soft" inquiry rather than a hard one since a hard inquiry will count as a negative on your report.  Only have a hard inquiry when you actually apply for the loan.

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  • 2 months ago

    In the UK usually 3 months

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  • 2 months ago

    Whenever they are next scheduled to report, which is typically every 1-3 months.

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  • 2 months ago

    Depends on how fast they report to the credit agencies. Check Credit Karma it is free

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  • Anonymous
    2 months ago

    Don't worry about when they reported it.  The main thing you don't want Cap One to do is report a late payment and that has to be more than 30 days late before they report it to the credit bureaus.  

     

    'But they reported an increase in debt on March 14th'.  So now you know when you need to have a payment in their hands so they are reporting a zero balance IF you want to play that game.  $296 out of $1000 is essentially 30% if they round off.  

     

    if you really want to avoid any issues, you can pay your credit card in advance.  Let's say you know in the next week you are going to be charging about $150 in stuff.  Make a payment now for $150.  By the time the charges hit, you will have a credit and the charges will just be taken from your credit balance.  Whenever they report your balance, you owe $0.

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