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Your Credit May Not Match Your Credit Report

A recent article at The Consumerist reminded me on an interesting moment I had. When I went to the bank to get my car loan, I was told I had a $1300 balance on one of my credit cards. I paid that balance about a month before.

So why did it still say that I owed $1300 (small enough percent of available credit it did not hurt my score) when I had paid? There is often a lag between real life and your credit report.

Financial institutions send updates to the credit agencies on a regular basis. Some do it almost daily. Some do it weekly. Some do it monthly. When I worked in a bank, we sent data to TransUnion about once per month.

This generally does not effect you in a big way. It is just a delay in updating your credit report. However, it is wrong to think that just because you pay off your credit card in full every month (like me) you will not have a balance reported. This would only really matter if you are about to apply for a loan. If you plan on applying for a loan in the next month or two (specifically a mortgage), it is probably a good idea to stop using the credit card and start using the debit card for a couple of months. That will ensure you are nearing a zero percent usage of available credit.

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