I Paid Off My Credit Cards and My Score Didn't Change. What Gives?

Credit score updates don't always happen right away.

As someone who generally maintains a pretty decent credit score, I was surprised to see my score drop by almost 20 points at one point last year. The reason? I'd racked up a huge balance on one of my credit cards, partly due to an unanticipated home repair and partly because I happened to be paying for a few other larger-than-usual expenses at the same time.

I managed to pay that credit card bill in full by its due date, so I didn't incur interest on those charges. Thankfully, I had enough money in my savings account to make that possible. But because my credit utilization ratio rose temporarily, my credit score took a hit.

I figured that just as my score had seemingly dropped overnight, so too would it climb back up once that bill got paid. But that didn't happen. In fact, it took a couple of months for my credit score to go back to its previous level.

If you've also recently paid off a chunk of credit card debt, you may be expecting immediate results from a credit score standpoint. But that unfortunately may not happen, as I learned from my own experience.

Why the holdup?

In an ideal world, paying off a credit card balance would be reflected on your credit report immediately. In reality, it can take a few months for your credit score to adjust after a balance is paid off or whittled down. So if you knock out a balance and don't see an improvement to your credit score right away, don't panic.

It takes time for credit card companies to report your new balance to the credit bureaus that put together your credit report. And only once your credit report is updated with that positive activity can you expect your credit score to increase.

But that can take a couple of billing cycles, even though you'd think it would happen right away. So there's probably no need to take action if you pay off your credit card debt but don't see a change in your credit score the same week or even month.

That said, if it's been more than two months since you've paid off your credit cards and your credit score hasn't budged, it pays to do some digging. First, you'll want to access your credit report and see what balance is being reported there. It may be that for some reason, the right information hasn't been reported to the credit bureaus.

From there, you may have to come up with documentation showing that your credit cards have, indeed, been paid off. But that should be fairly easy to do -- either with a paper statement (if you get them in the mail) or by finding the information in your online account.

Avoiding a credit score hit

Racking up a large credit card balance -- even temporarily -- could cause your credit score to lower. As a general rule, it's best to keep your credit utilization ratio to 30% or less if possible.

If you exceed that threshold, your credit score might drop, but once you pay off your balance, your score should improve. It may just take a bit longer than you'd like to see your paid-off balance reflected in that score.