1. Loan Payoff: When the car dealership pays off your auto loan, they will send a payoff statement to the lender. The lender will then process the payment and update their records.
2. Update to Credit Bureaus: Once the lender has updated their records, they will report the updated information to the three major credit bureaus: Experian, Equifax, and TransUnion.
3. Credit Report Update: The credit bureaus will then update your credit report to reflect the paid-off loan. This process can take several days to a few weeks.
4. Timeframe: On average, it can take around 30 to 60 days for the paid-off loan to appear on your credit report. However, the exact timeframe can vary depending on the lender and credit bureau.
It's important to note that during this transition period, your credit report may show a mix of information. For instance, you might see the old loan balance listed as "open" or "in progress," while the new balance might be reported as "paid" or "closed." This is normal, and the discrepancy will be corrected once the credit bureaus have received and processed the updated information.
If you're concerned about the accuracy of your credit report or have questions about the payoff process, you can contact the lender directly or visit the websites of the three major credit bureaus to view and dispute any discrepancies.
