 TITLE: How Long After You Pay Off Debt Does Your Credit Improve? CONTENT: Revolving Accounts (Credit Cards)\n---------------------------------\nA credit card is a form of revolving credit, meaning money can be re-borrowed as it's paid back, and there's no end term. When you have an active revolving credit account, your balance plays a major role in your credit utilization ratio, which influences as much as 30% of your FICO® Score☉ .\nYour credit utilization ratio measures how much of your available credit you're using at any given time. For example, if you have one credit card that has a balance of $1,000 and a credit limit of $2,000, your credit utilization rate is 50%. Credit scoring models look at how much of your available credit you're using both on individual cards and in total across all of your accounts.\nThere's no magic number to aim for, but generally a credit utilization above 30% can drag down your credit score. Keeping your utilization below that rate can help you improve your credit. Those with the highest credit scores tend to have credit utilization rates in the low single digits, according to Experian data.\nWhen you pay off a credit card balance and keep the account open, you're doing yourself a huge favor as far as your credit is concerned because you've reduced the amount of available credit you're using. This boost from paying off an account can be seen on your credit report quickly; lenders usually report account activity at the end of the billing cycle, so it could take 30 to 45 days for it to impact your credit report.\nIf you're tempted to close the account, however, remember that you'd be giving up that line of available credit. If you carry balances on other cards, closing a credit card may increase your credit utilization rate, which can lead to lower credit scores. For that reason, you'll typically get more benefit from keeping a paid-off account open, unless the temptation to rack up charges is too high or you're paying an annual fee that doesn't work with your budget. END