Personal loan closure: How long does it take for your credit score to improve?

Paying the final equated monthly instalment (EMI) on a personal loan does not guarantee an immediate improvement in the borrower’s CIBIL score. The lender must first report the loan closure to the credit bureau, after which the updated information is processed and reflected in the credit report.

Under Reserve Bank of India (RBI) rules, credit institutions are required to update credit information every fortnight from January 1, 2025. However, the time taken for the revised information to appear in an individual’s credit report can vary.

Moreover, closing a loan is only one of several factors that influence a credit score. According to TransUnion CIBIL, payment history, credit utilisation, the age of credit accounts and recent credit enquiries also affect an individual’s credit profile. Consequently, a borrower may see no immediate change in the score even after repaying a personal loan in full.

How long does a credit score update take?

After making the final payment, borrowers should check whether the lender has reported the account as closed and updated the outstanding balance to zero.

Credit bureau updates are not necessarily reflected in the consumer’s report immediately after the payment. According to CIBIL’s consumer guidance, recent payment updates may take around 15 to 30 days to appear, depending on the reporting and processing cycle.