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 Debt.com 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.

Is your credit rating holding you back? Find out how to fix it.

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

Do you really?

One of Debt.com’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? Can’t find what you need to know? We can! Submit any debt or finance question you have, and we’ll tap a pro who will respond as quickly as possible.

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About the Author

Howard Dvorkin, CPA

Howard Dvorkin, CPA

I’m a certified public accountant who has authored two books on getting out of debt, Credit Hell and Power Up, and I am one of the personal finance experts for Debt.com. I have focused my professional endeavors in the consumer finance, technology, media and real estate industries creating not only Debt.com, but also Financial Apps and Start Fresh Today, among others. My personal finance advice has been included in countless articles, and has appeared in the New York Times, the Washington Post, Forbes and Entrepreneur as well as virtually every national and local newspaper in the country. Everyone should have a reason for living that’s bigger than themselves, and besides my family, mine is this: Teaching Americans how to live happily within their means. To me, money is not the root of all evil. Poor money management is. Money cannot buy happiness, but going into debt always buys misery. That’s why I launched Debt.com. I’m glad you’re here.

Published by Debt.com, LLC