It is such a weight off of your shoulders when you are able to finally submit that last payment to erase all of your debt. For many, this is something that can take months, and even years, to accomplish. You may be curious after your debt is officially paid off as to when your credit score will improve. Although it feels like you should see an immediate spike, unfortunately that is not the case. It can take several billing cycles for this to show up on your credit report. There are also several other factors that have to be taken into consideration, such as what type of debt you have. Different types of debt can affect your credit score differently. Here are two examples of different types of debt:

• Installment Loans. If you have a loan such as a mortgage, student or car loan, after your final payment is made, the account is completely closed. Installment loans are set up so that the amount of money you are borrowing is paid regularly each month. After your installment loan is totally paid off, you should see that your credit score will go up after a couple of months. With an installment loan, the catch is that it can potentially negatively affect your credit if you do not have any other lines of credit, due to your credit mix.
• Revolving Credit. The best example for revolving credit is a credit card, where you are given a set amount that is your line of credit, and you are able to spend as much up to that limit as you want over time. With this type of debt, there is no specific end term. An active credit card has a big effect on your credit. When you fully pay off your credit card balance, be sure to keep the account open so that it ultimately will reduce the amount of credit you are using.