How long does it take for paid off accounts to show zero balance

Dear Experian,

If I pay off all of my credit cards to a zero balance, how long does it take for that payoff to show up in an improved credit score? I want to pay off all of my cards and improve my score for a mortgage application.



Dear ANG,

There are three aspects to your question.

The first is how long it takes for an updated balance to get reported. Most lenders report account updates to Experian only after payments have been posted for that billing statement. You have to allow time for the lenders to receive your payments, update their records, send the updates to Experian and for Experian to update its records. That can translate to as much as 30 to 45 days.

For that reason, I recommend that you wait at least one billing cycle – two is even better – before checking your credit report to see if the updates have been made.

The second aspect is whether your balance will actually be zero. The amount that is reported each cycle is the balance that you owe on the statement you received for that month.  So, the only time you will have a zero balance is when you have made absolutely no charges that month and have no outstanding balance from previous months.

Finally, you can’t assume that having no balances is always a good thing. If you stop using credit altogether you are no longer demonstrating whether or not you can manage credit. Scoring models will not score a report that has had no recent activity. The time frames vary by model, but can be as short six months with no balance updates.

I think you are headed in the right direction. If you haven’t missed any payments, usually the best thing you can do to improve your creditworthiness is to pay down your balances. Just remember to do so well in advance of applying for new credit, and then continue to use your credit for small amounts that you can pay in full each month.

I also recommend that you invest in a credit score with a credit score report.

Paying off balances is always a good thing, but it might not be the most important thing for you to do in your specific situation. The credit score report will explain what from your credit report most impacted your creditworthiness. You can use that information to take action that will over time improve your creditworthiness, which will be reflected in your credit scores.

You might also consider subscribing to a credit monitoring service, such as Experian’s TripleAdvantage. It provides unlimited access to your credit report and credit score and gives you a thorough analysis of your credit score.

You can use the credit monitoring service to determine what you need to do and then track your progress by watching the credit score improve as time goes by.

Thanks for asking.

- The “Ask Experian” team

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