How Long Do Closed Accounts Stay on My Credit Report?

You might be finished with a credit account, but that doesn’t mean the credit account is finished with you.

Closed accounts stay on your credit report for 7-10 years. A good one that you voluntarily closed will boost your credit score for 10 years. An account involuntarily closed by the creditor will drag down your score for seven years.

Even if the account is in good standing, there are reasons not to close it. Here’s what you need to know before making that decision.

Types of Closed Accounts

A closed account is any form of credit that you no longer use. For instance, a mortgage is closed once it’s paid off. That might take 30 years of scheduled monthly installments.

It’s highly unlikely you’d be paying off a car loan or personal loan for that long. But whenever you make the final monthly payment, that account is closed.

Conversely, when you get a credit card, you are not borrowing a set amount of money. It’s revolving credit, meaning you can borrow funds as you need them. If you make the minimum monthly payment, you can keep the account open indefinitely.

It’s basically the same with home equity loans (HELOCs). You must pay only the interest on the amount you’ve borrowed. Though unlike credit cards, which can remain open indefinitely, closed credit cards no longer allow new charges and can impact your credit history and utilization ratio. The period in which you can draw money on a HELOC is typically 5-10 years, and the repayment period is often 10-20 years.

Positive Closed Accounts

A positive closed account is one that was paid on time. If your mortgage or car payment was due on the 15^th day of every month, you paid it on or before the 15^th day of every month. Even if, as with a 30-year mortgage, that meant 360 months of writing checks or transferring money.

That clock doesn’t tick with credit cards. Those accounts can be closed once they are paid in full, though you can also carry a $0 balance and keep the account open. In fact, doing that can help your credit score.

A positive closed account will stay on your credit report for 10 years, which is a good thing. As the name indicates, a positive closed account reflects positively on your financial management.

Negative Closed Accounts

Negative closed accounts are those that had missed payments and/or late payments. Negative closed accounts might also have been terminated through debt settlement or turned over to collection agencies to recover money you didn’t pay back to the creditor.

They reflect negatively on your financial management and usually stay on your credit report for seven years from the date of the first missed payment.

Why Closed Accounts Stay on Your Credit Report

Closed accounts stay on credit reports to protect borrowers and creditors. That was codified with the Fair Credit Reporting Act (FCRA) in 1970. Before then, a person’s credit score could include things like character statements and medical history.

The FCRA tightened up what information could be used to compile credit scores. It needs to be accurate and verifiable. The whole point is to provide a clear record of your loan repayment history, which allows creditors to properly judge how risky it is to loan you money.

Staying on your credit report doesn’t mean it’s actively affecting your score, but if you have a good financial history, it helps show you’re worth the risk.

How Closed Accounts Affect Your Credit Score

Your credit score is determined by several factors, all of which can be impacted by closed accounts. They include:

• Payment history (35% of your score). Late or missed payments will drag it down.
• Credit utilization (30%). That’s how much you’ve borrowed in relation to your credit limit. Say you’ve charged $2,000 on a credit card with a $5,000 limit and spent $1,000 on another card that had a $4,000 limit. Your credit utilization rate would be 33.3% ($3,000 spent divided by $9,000 credit limit equals 33.3%).

If you close the second account, your ratio jumps to 40% ($2,000 spent divided by $5,000 limit equals 40%). The lower your ratio, the better your score. Ideally, it would be about 10%. Anything above 30% will negatively impact your score, so be mindful of closing accounts that have low credit utilization.

• Credit age (15%). The longer you’ve had credit, the better your score will be – if you’ve made payments on time. Credit scores measure how long you’ve had all your accounts to get an average.

Closing an account that you’ve had for a long time will lower your average, though the overall impact on your score could be minimal. If the account was in good standing, it can stay on your credit report for 10 years.

• Credit mix (10%). Your score will be higher if you have a variety of accounts, like revolving credit (credit cards) and installment credit (mortgages or auto loans). A good mix shows you juggle different types of credit effectively.

Voluntarily vs. Involuntarily Closed Accounts

Did your creditor close the account against your wishes, or did you do it?

It makes a big difference.

A voluntarily closed account is when you paid off the loan or the amount of credit you charged, and then decided you no longer want the account.

An involuntarily closed account is one that’s closed by the creditor because you missed payments, committed fraud or failed in some other way to hold up your end of the deal.

A lot of people have fallen into that hole. Credit card lenders wrote off $46 billion in seriously delinquent balances in the first nine months of 2024.

Can You Remove Closed Accounts from Your Credit Report?

Closed accounts can be removed from your credit report, though it takes work and evidence. If the information on the account is accurate, FCRA guidelines will keep the closed account on your report for the required periods.

If the information is inaccurate, outdated or unverified, you have a decent chance of getting the closed account removed. But it’ll be up to you (or your lawyer) to prove it.

Otherwise, your best hope is to throw yourself at the mercy of the creditor and ask them to erase a slip-up.

When Removal is Possible

You can remove a closed account from your credit report if it has errors. And you wouldn’t be the first to do it. A 2024 Consumer Reports study found that 44% of consumers found mistakes on their credit reports.

You can also remove closed accounts if you can show you were the victim of identity theft or fraud related to the account.

Another way is to send a “goodwill letter” to your creditor, asking it to remove negative information. That’s typically done if you’ve missed a single payment but have a good overall credit history.

There aren’t any statistics on the success rate of goodwill letters, but you have nothing to lose by throwing yourself at the mercy of your creditor.

When Removal is Not Possible

If the report is accurate, you can’t remove a closed account from your credit report. That sucker will stay there for up to seven years.

If you think it’s inaccurate but the creditor disagrees, you’re not out of luck. The three major credit reporting bureaus – Experian, Equifax and TransUnion – allow you to file a dispute.

You should submit a letter with the details and supporting documents to the bureaus. They have 30 days to investigate your claim and notify you of their decision.

Best Practices for Managing Closed Accounts

The first thing to do if you’re considering closing an account is nothing. That’s right, hit the pause button and weigh the pros and cons of banishing the account into the dustbin of your financial history.

Remember, a long-held credit card in good standing will reflect well on your credit score, even if you rarely break it out of your wallet or purse.

Consider contacting the creditor before closing the account. They might lower your interest rate or give you some other break to keep you as a customer.

If you decide to close the account, be sure to keep the pertinent documents. And monitor your monthly statements and credit reports to make sure the account has indeed closed.

When and How to Check If a Closed Account Is Still on Your Report

When you close an account, it should appear as “closed” on your credit report within one or two billing cycles. If it had a positive payment history, it would stay on your report for seven years. If it had negative information, the account would linger on your credit report for 10 years.

Under the FCRA, you are entitled to see your credit report once a week from each of the major credit bureaus – TransUnion, Equifax and Experian. You can contact them separately or see all your scores at once by contacting AnnualCreditReport.com.

If a closed account stays on your credit report beyond the required time (seven years for negative, 10 years for positive), gather the documents you’ve hopefully saved and contact the credit bureaus.

FAQs

Does Closing a Credit Card Hurt Your Score?

Closing an account, even one you’ve paid off on time, can damage your credit score. That’s because your score is determined by more than a positive payment history.

One factor is the credit utilization ratio, which is the amount of credit you’re using compared to your credit limit. Closing an account could increase your ratio above 30%, which will take points off your credit score. Crunch the numbers to see how closing a card will impact your utilization ratio.

Closing an account will reduce the average age of your accounts. There is no ideal age for accounts, but the longer an account is in good standing, the better it is for your credit score.

Closing an account will also impact your credit mix, though that accounts for only 10% of your overall credit score.

How Long After Paying Off a Loan Does it Show as Closed?

When you reach that glorious day where you make a final payment on a loan, don’t expect your credit report to immediately notice. It typically takes one of two billing cycles for a paid-off account to show up on your report.

It can take another month or two for it to register with the three credit bureaus. Monitor your report to make sure the paid-off loan hasn’t somehow fallen through the reporting cracks.

If that account is still listed as active or open after three months, contact the lender and politely ask it to get its act together and update your account status. If it takes longer than that, feel free to be impolite.

What if I Reopen a Closed Account?

Closed accounts can be reopened, but you must act fast and have the right creditor. Policies vary depending on the credit card issuer.

Accounts typically must be reopened within 30 days of closing, though some limit the window to 15 days. Some issuers flat-out don’t allow accounts to be reopened at all.

Your chances of getting an account reopened are much higher if it was voluntarily closed. If it was closed by the creditor due to missed payments or default, you can try to have it reopened. Just don’t hold your breath that it will happen.

Do Closed Accounts Affect My Ability to Get New Credit?

Closed accounts can affect your ability to get new credit in good and bad ways. The good way is if the account was in good standing and voluntarily closed. That will be a plus on your credit report for 10 years.

The bad way is if the account was closed involuntarily due to late or missed payments. That black mark will impact your credit score for seven years.

Closed Accounts on Your Credit Report

Closing an account does not mean you are through with it. An account that was involuntarily closed due to missed payments or other problems will stay on your credit report for seven years.

An account that was paid on time and you voluntarily ended will stay on your credit report for 10 years.

There’s a lot of incompetence in credit reporting, so it’s important to check your statements for inaccurate information. It’s even more important to hold up your end of the relationship with your creditor.

It agreed to loan you money or give you a line of credit. You agreed to pay what you owe on time.

If you do, a closed account will boost your credit score and help you establish new credit relationships. If you don’t, the closed account can haunt you for years after you think it’s over.