Paid Off Your Loan But Credit Score Still The Same? Here’s What to Do | Business News

Last Updated:July 17, 2025, 16:53 IST

Whether you’re applying for a new loan or a credit card, lenders often check your credit score to assess your creditworthiness.

Your credit score plays an important role in determining your financial health.

Paying off a loan is a significant financial milestone. It not only reduces your debt burden but also boosts your credit score. But what if your credit score has not been updated even after closing the loan?

Your credit score plays an important role in determining your financial health. Whether you’re applying for a new loan or a credit card, lenders often check your credit score to assess your creditworthiness.

A good score gives them the assurance that you are likely to repay the loan without default.

Why hasn’t your credit score been updated?

There are times when the credit score may not reflect the change immediately, even after the loan is fully repaid. This is because the lenders may take 30 to 60 days to report the updated information to credit bureaus – the reason the loan status may still appear active.

There could be a few reasons for this, with the lender not updating the status on their end, credit bureau processing time, delayed reporting process, mismatched information, or technical error while submitting the data, among them.

How to fix this issue?

Contact your lender and ask for the loan closure documents.

Make sure you get important documents such as a no-dues certificate or a loan closure letter. It should also mention the date of your last EMI.

If your lender has confirmed closure but your report hasn’t changed, then you should visit the credit bureau’s official website, choose the dispute resolution portal, and select the issue, like the loan still showing active, with proof.

The credit bureau will then run an investigation.

The issue is likely to be resolved within 7 to 21 working days.

Once you raise a dispute, check your credit report regularly.

What is a credit score?

A credit score or CIBIL score is a three-digit number that represents your creditworthiness. This score is based on your credit history, including loan repayments, credit card usage or paying bills.

Credit scores typically range from 300 to 900. The higher the score, the better your chances of getting approved for loans.

Business Desk

A team of writers and reporters decodes vast terms of personal finance and making money matters simpler for you. From latest initial public offerings (IPOs) in the market to best investment options, we cover al…Read More

A team of writers and reporters decodes vast terms of personal finance and making money matters simpler for you. From latest initial public offerings (IPOs) in the market to best investment options, we cover al… Read More

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