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The truth behind the credit report updating system

December 11th 2012

It is one of those many questions consumers spend nights contemplating the answer to. The time frame within which making a payment or applying for a new line of credit is reflect on your credit report has been something of an enigma for most people. There are tons of extremely definite but equally inaccurate data floating about on the web which further confuses people and tends to push them in the wrong direction.

Most of these people who are worried about their credit report are either trying to spruce it up and improve their credit rating in general or are looking to apply for something big like a car loan or a mortgage. To be absolutely honest about it, there is no one definite answer to the question “How often does my credit report change?” It could change in a matter of seconds or it could take days depending on a number of factors.

How often can your credit report change?

When you are applying for a new line of credit, the lender usually runs what is known as a hard enquiry against your credit report. These hard enquiries usually show up when another lender checks your credit report.

Let’s assume that you have gone out shopping for a car loan and you have a couple of lenders you want to look into. You visit the first lender and you sit down with him, discuss the terms of the loan and he pulls your credit report to check your payment history thereby generating a hard enquiry (which is known to lower your score although after FICO 8 this has been changed). You visit the other lender within an hour and when he pulls your report, it would show something different from what you had seen an hour ago.

How often is your credit report updated?

Everything entirely depends on how often the records maintained by the credit reporting agencies like Equifax and TransUnion containing your credit information is updated with changes. Depending on your activities and the reporting cycle of lenders, your credit report could change on a daily basis.

To be precise, the credit reporting agencies do not actually maintain a file on you, rather, when you or a lender requests a copy of your credit report, the agency rummages through their database and compiles a report out of the information that is available with them. In short, your report is nothing more than the data the CRAs have available with them and you actually do not have a credit report in corporeal form till you have requested a copy of it.

The changes and inquiries do not always show up instantaneously on your report. Lenders do supply the CRAs with regular updates but each have their own varying reporting cycles. For example, credit card companies usually make reports to the CRAs towards the end of a consumer’s billing cycle.

The changes to your credit report is caused by information being added to it as well as subtracted from it. Inactive accounts in good standing as well as key derogatory items are dropped from your credit report within 7 years from the last day of account activity. Larger items like Chapter 7 bankruptcy stay on your credit report for a longer period of time though.

It’s a good idea to keep checking your credit report on a quarterly basis and see if there are any discrepancies which need to be disputed. This is important simply because statistics say that almost 79 percent of consumers have some kind of error on their credit report which might negatively affect their score. Once you have disputed an item, check your report again after 30 days and see if the changes show up.

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