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A reader is about to pay off all her credit cards. She wants to buy a new car, but that might undo everything.

Question: I had nearly $5,000 on four credit cards that I was carrying for years, but then I read what you had to say about getting rid of it [Reduce Credit Card Debt in 5 Easy Steps]. So I did that. Believe it or not, next month I should have everything paid off!

So thank you for that, but now I have a question: I need a new car and want to make sure my credit score takes into account how I paid off all my credit cards. I know that a higher credit score will mean a lower rate on a car loan. How long do I have to wait?

— Regina in Michigan

Howard Dvorkin answers…

The answer to your question is quite simple. The reason for the question is more complicated.

Thankfully, it doesn’t take long for news of your good deeds to spread. Most lenders, and that includes companies issuing credit cards, update their account information once a month. That means they report new information to the Big Three credit bureaus — Equifax, Experian, and TransUnion — every 30 days or so.

That said, I’d give it 45 days to ensure everything is logged everywhere. By then, your credit reports will be up to date. Your credit score is derived from that. However, you might not notice a bump in your score for months.

Since you’ve already followed one report, I urge you to read another: How to Improve Your Credit Score Step-by-Step. You’ll find a more detailed explanation on how soon credit scores reflect improvements, plus steps for ensuring your hard work is recognized.

That said, I’m concerned by your five words in your question to me: “I need a new car.”

Do you really?

One of’s partners is Money Talks News, an excellent personal finance website run by Stacy Johnson. He owns a big house on the water in South Florida, owns a boat — and has never bought a new car in his lifetime. He even wrote an articled called Why I Don’t Buy New Cars, in which he writes, “Paying interest to finance a depreciating asset is not how you get rich.”

I’m focusing on this, Regina, because I see your situation all too often: You’ve just completed a Herculean task and paid off those stubborn credit card balances that have been dogging you for years. yet you’re ready to go right back into debt, this time for an auto loan.

Instead, I have a recommendation that I know will sound boring and parental: Buy a used car, and only as much as you can afford. It won’t be an attractive vehicle, but if you can sacrifice for just a little longer, you’ll have time to save money.

Paying off debt is worthy of applause, but if you can set aside money for an emergency fund and even retirement, then you deserve a standing ovation. Don’t stop now, Regina. Build on your success.

Have a debt question?

Email your question to and Howard Dvorkin will review it. Dvorkin is a CPA, chairman of, and author of two personal finance books, Credit Hell: How to Dig Yourself Out of Debt and Power Up: Taking Charge of Your Financial Destiny.

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Meet the Author

Howard Dvorkin, CPA

Howard Dvorkin, CPA

CPA and Chairman

Dvorkin is the author of Credit Hell and Power Up and Chairman of

Ask the Expert, credit cards, credit report, credit score

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