How Long Do Closed Accounts Stay on Your Credit Report?

How Do Closed Accounts Affect Your Credit?

Closed accounts on your credit report could affect your credit scores positively or negatively depending on a few factors.

Your credit reports chronicle your history of managing different types of accounts, including credit cards, personal loans, auto loans and mortgages. They can also include bankruptcy filings and, sometimes, buy now, pay later accounts. Credit scoring models consider many data points from your credit reports, including information from both open and closed accounts.

Credit scores generally don't consider who decided to close the account. In other words, closing a credit card on your own isn't better or worse than a credit card issuer closing your card. And overall, the exact effect of closing an account will depend on the type of credit score, the type of account and the rest of your credit report.

However, here are a couple common situations that highlight how closing accounts can affect your credit scores.

Closing Credit Cards Can Increase Your Credit Utilization

Your credit utilization ratio is a comparison of your revolving accounts' credit limits and balances. You can calculate it by dividing the sum of your accounts' balances by the sum of their credit limits. (Use the balances on your credit report rather than the current account balances since your credit score is based on the information in your credit report.)

Credit utilization can be a significant factor in determining credit scores, and a low utilization ratio is best for your scores. Closing an account can decrease your available credit, which might increase your utilization rate and hurt your credit scores.

Example: Let's say you have three credit cards with credit limits of $2,000, $3,000 and $5,000. If your only balance is $1,500 on the card with the $5,000 limit, your overall utilization ratio is 15% ($1,500 divided by $10,000). But if you close the account with the $3,000 borrowing limit, your utilization ratio becomes 21% ($1,500 divided by $7,000).

One exception is that some credit scores consider closed accounts with balances when calculating utilization rates. Occasionally, people close credit cards with balances, but this usually happens when someone falls behind on payments, and the issuer closes the past-due account.

Learn more: Does Closing a Credit Card Hurt Your Credit?

Closed Accounts Might Affect Your Credit Mix

Credit scores tend to favor people who have experience with both installment loans, like personal loans and mortgages, and revolving accounts, such as credit cards. Your credit mix isn't a major scoring factor, but having both types of accounts in your credit report can be better than only having one.

You could see your credit score drop when you pay off a loan, such as an auto loan, if it's your only installment loan. Without that loan, you're no longer managing a "mix" of credit, even if you still have a credit card. However, similar to credit utilization rate calculations, some credit scoring models consider closed accounts with balances when determining your credit mix.

Closed Accounts Will Eventually Reduce Your Average Age of Accounts

Credit scoring systems also tend to favor borrowers who have a lengthy history with credit accounts. Scoring models may consider the age of your oldest account, newest account and the average age of all your credit accounts. And all else being equal, a borrower with a longer credit history will tend to have higher credit scores than one with a shorter history.

FICO and VantageScore^® credit scores consider closed accounts when calculating age-related scoring factors. However, closed accounts will fall off your credit report in seven to 10 years. Once that happens, they can't affect your credit scores any longer.

Learn more: How "Short Account History" Affects Your FICO^® Score^Θ

How Long Do Closed Accounts Stay on Your Credit Report?

Closed accounts can remain in your credit file for seven to 10 years. The timing depends on the account's status when it's closed.

Accounts That Are Current When Closed

When an account is closed and it isn't past due, the account can stay in your credit report for up to 10 years. It could continue having a positive effect on your credit scores the entire time.

If you previously missed a payment and then brought the account current, the late payment will still fall off your credit reports after seven years. The timeline doesn't change because the account isn't open, and the rest of the account can stay on your credit report for the full 10 years after closing.

Accounts That Are Past Due When Closed

An account that is past due when it's closed will be removed from your credit reports seven years from the initial missed payment in the series of missed payments.

Say someone misses several credit card payments in a row, and the card issuer decides to close the account. If the first payment due date they missed was in January 2020, the entire credit card account will be removed from their credit reports by January 2027. The date of the first missed payment in a series is called the original delinquency date.

Now, say they missed a few payments in January 2020 and then brought the account current while it was still open. They fell behind again starting in June 2023, and the card issuer closed their past-due account a few months later.

The original late payments will fall off their credit report after seven years, but the account will remain. Then, the entire account will be removed by January 2030, which is seven years after the first late payment in the series that led to the closure.

Learn more: How to Pay a Past-Due Account

Collection Accounts

Collection accounts may be related to unpaid loans, credit cards or other types of bills. The collection account can stay on your credit report for seven years from the date of the first missed payment that led to the account or bill being turned over to collections.

Going back to the first credit card scenario, say someone missed several payments starting in January 2020, which led to the account's closure. The card issuer might have assigned or sold the account to a collection agency after unsuccessfully trying to collect the past-due debt.

When that happens, the original account's balance goes to $0, and a new collection account with a balance will appear in your credit report. Its balance may be higher to account for interest and fees.

The collection account and the original credit account will fall off your credit report seven years after the first late payment from January 2020. The opening date of the collection account doesn't impact the timeline.

Learn more: How Does Debt Collection Work?

Bankruptcy Filings

The credit reporting timeline for bankruptcy filings depends on the type of bankruptcy.

• Chapter 7 bankruptcy: Chapter 7 bankruptcies can remain on credit reports for up to 10 years from the date of the initial filing.
• Chapter 13 bankruptcy: Chapter 13 bankruptcies remain on credit reports for up to seven years from the date of the initial bankruptcy filing.

Filing for bankruptcy can lead to the discharge of included credit accounts, which means creditors can't sue you for the debt any longer. Debts included in a Chapter 7 bankruptcy might be discharged right away. With a Chapter 13 bankruptcy, you may be on a three- to five-year repayment plan, and any remaining balances get discharged at the end.

Past-due accounts that were included in your bankruptcy filing will stay in your credit file for up to seven years from the account's original delinquency date. If the account wasn't past due, it will be removed from your credit report with the bankruptcy filing.

Learn more: How Does Filing Bankruptcy Affect Your Credit?

How to Improve Your Credit History

Closed accounts can continue to affect your credit scores as long as they're in your credit file. Whether you're waiting for negative closed accounts to fall off, or looking to build on a previously positive credit history, here are several things that might help your credit.

• Pay all your bills on time. Your payment history is the most important credit scoring factor, and missing payments can hurt your scores by a lot. Use autopay, calendar reminders, alerts or another system to keep track of your bills and try to always make at least the minimum payment on time. Fortunately, your account isn't considered late for credit scoring purposes until the bill is at least 30 days past due, so you have a chance to correct things if you make a mistake. Still, even being one day late can lead to fees or lost benefits.
• Pay down your credit card balances or make early payments. Your credit utilization rate is another important scoring factor. If you're carrying credit card balances, paying down that debt can lower your utilization rate and improve your scores. Even if you pay your bills in full, using a large portion of your card's limit can lead to a high utilization rate. You might be able to avoid this by making early credit card payments.
• Keep your credit card accounts open. Sometimes closing a credit card makes sense, such as when there's a high annual fee that you don't think is worth the benefits, you regularly overspend with the card or you want to simplify your finances. But try to avoid closing cards that aren't costly or difficult to manage. Keeping more accounts can help you maintain a lower utilization rate and help your scores.
• Regularly use your credit cards to avoid closures for inactivity. With the above advice in mind, it's also wise to avoid letting your credit cards go inactive for extended periods because card issuers might close inactive accounts. A good strategy for keeping a card active without running up a balance is to use it for a recurring fixed expense, such as a streaming service subscription or a gym membership. You can even set up autopay to keep the card active with minimal hassle.
• Regularly review your credit reports. Check your credit reports regularly and remember that you have the right to dispute any entries that you believe are inaccurate. Although this doesn't happen often, identity theft, fraud or mistakes can sometimes lead to credit report errors that might be hurting your scores.

Learn more: How to "Fix" a Bad Credit Score

The Bottom Line

Account closures don't result in the account being removed from your credit reports—at least not right away. The accounts can stay for up to seven or 10 years depending on whether the account was past due when it was closed. In the meantime, sign up for free credit monitoring from Experian to track your FICO^® Score and get alerts when there are changes in your credit report. You can even get personalized insights into what information in your credit report is helping or hurting your score the most.