Removing Closed Accounts from Your Credit Report


Closing a credit card account can hurt your score by increasing your credit utilization ratio if you carry balances on other cards. But the account will stay on your credit report for 7-10 years, and it will continue to factor into your length of credit history.


Can I Dispute Accurate Information From My Credit Report?

Accurate items in your record can’t be disputed or removed before the term set by law (seven years for most negative items). For example, if you missed payments on your credit card or defaulted on a student loan, your dispute request will be denied.

If you do have valid negative items on record, here are some things that might help:

1. Send a request for “goodwill deletion”

Writing a goodwill letter can be a viable option for people who are otherwise in good standing with creditors. If you’ve taken steps to pay down your overall debt and have been paying your monthly bills on time, you might be able to convince your creditor to “forgive” the late payment.

While there’s no guarantee that the creditor will delete the derogatory information, this strategy does get results for some. Goodwill letters are most successful for one-off problems, such as a single missed payment. However, they are not effective for debtors with a history of late payments, defaults or collections.

When writing the letter:

  • Take responsibility for the issue that lead to the derogatory mark
  • Explain why you didn’t pay the account
  • If you can, point out good payment history before the incident

2. Work with a credit counseling agency

Several non-profit credit counseling organizations, like the National Foundation for Credit Counseling (NFCC), can help dispute inaccurate information on your record.

The NFCC can provide financial counseling, help review your credit history, help you create a budget and even a debt management plan free of charge. It also offers counseling for homeownership, bankruptcy and foreclosure prevention.

As always, be wary of companies that overpromise, make claims that are “too good to be true” and ask for payment before rendering services.

When looking for a legitimate credit counselor, the FTC advises consumers to check if they have any complaints with:

  • Your state’s Attorney General
  • Local consumer protection agencies
  • The United States Trustee program

Are pay-for-delete negotiations worth it?

Pay-for-delete is a negotiation strategy in which you offer to pay your debt (partly or in full) in exchange for the collection agency to remove the derogatory item from your file. Since collection agencies want to get back as much money as possible, paying the debt may be enough incentive for them to remove the negative entry. However, pay-for-delete is not a dependable solution, and it falls in a legal gray area.

Collection agencies are required by law to report accurate information, just like reporting companies and creditors. While you can certainly request it, a collection agency has the right to refuse your request. They may agree to label the collection as paid — which is what happened — but they won’t delete the collection entry itself.

Also, note that pay-for-delete agreements might not improve your score. The most recent credit score models (FICO 9 and VantageScore 4.0) don’t factor in paid collection accounts when calculating your score, which means that fully paying the account will have the same effect as negotiating a pay-for-delete. However, bear in mind that unpaid collections will still impact your score.

Avoid the following strategies

While the following methods can be tempting options when trying to repair your credit, they can often cause more harm than good. Stay away from the following:

Closing a line of credit that is already behind on payments

Closing a card that’s behind on payments doesn’t eliminate the debt. In fact, it can lower your credit score by increasing your debt-to-credit ratio, also known as credit utilization percentage. This ratio represents the amount of credit you’re currently using divided by the total amount of credit you have available.

For example, if you have two credit cards, each with a maximum credit limit of $5,000, your total available credit is $10,000. Owing $3,000 on one card and $2,000 on the other would mean you’re using 50% of your total available credit.

To improve your credit score, experts recommend keeping your credit utilization under 30%. Following the example mentioned above, that would mean using only $3,000 or less per cycle.

If you close one of your credit cards instead of paying it, you’ll have less available credit. Creditors evaluate your debt-to-credit ratio when you apply for new cards or loans. If your ratio is over that threshold, they might classify you as a high-risk borrower, offer you less attractive interest rates or even deny you credit altogether.

Filing for bankruptcy

Bankruptcy should be considered a last resort — it can seriously damage your score and hinder your ability to get loans, mortgages or credit for years after your debts are discharged.

There are two types of bankruptcies available for individuals: Chapter 7 and Chapter 13. A third type, Chapter 11, is meant for businesses.

Under a Chapter 7 bankruptcy filing, a court mandates the liquidation of your assets in order to pay your outstanding debt. A trustee is then appointed to review your finances and sell off any additional asset that isn’t protected under bankruptcy exemptions.

With a Chapter 13 bankruptcy, on the other hand, you’re allowed to keep your assets as long as you complete a court-mandated repayment plan meant to pay your highest priority, secured debt.

Impact of bankruptcy on your credit report

Filing for bankruptcy can lower your score by around 200 points or more. It will also negatively impact your chances of getting new lines of credit or loans for several years until your credit history substantially improves.

If you file for Chapter 7 bankruptcy, the derogatory mark will remain on record for up to 10 years; for Chapter 13, it’s seven years.

Wait for Accounts to Drop Off

If you choose not to take steps to remove closed accounts, you’ll be happy to hear that these closed accounts won’t stay on your credit report forever. Depending on the age and status of the account, it may be nearing the credit-reporting time limit for when it will drop off your credit report for good. If that’s the case, all you might have to do is wait a few months for the account to fall off your credit report, and then for your credit report to update.

Most negative information can only be listed on your credit report for seven years from the first date of delinquency.

If the closed account includes negative information that's older than seven years, you can use the credit report dispute process to remove the account from your credit report.

No law requires credit bureaus to remove a closed account that's accurately reported and verifiable and doesn't contain any old, negative information. Instead, the account will likely remain on your credit report for ten years or whatever time period the credit bureau has set for reporting closed accounts. Don't worry—these types of accounts typically don't hurt your credit score as long as they have a zero balance.

Removing a Closed Credit Account by Mail

To dispute by mail, send details of your claim and copies of any supporting documents to:


P.O. Box 9701 

Allen, TX 75013


P.O. Box 740256

Atlanta, GA 30374-0256


P.O. Box 2000

Chester, PA 19016

Other ways to improve your credit score

Add positive data to your credit report

There are a couple of fairly new options that may be attractive to help raise your score, like Experian Boost and UltraFICO. These are programs that allow the consumer to supply positive data in their credit report that can be used to increase scores. This is especially effective for people with limited credit histories. Both are simple to use and results are seen instantly.

To use Experian Boost you must allow the credit bureau to access to your banking information in order to pull things like utility and phone bill payments. Positive payment histories are incorporated in your report and can add points to your score. UltraFICO looks at your checking and savings account information for positive data such as how much you have in savings, how active your accounts are and how long they have been open.

Both use only positive data and you can enroll or drop out at any time. Also, both only impact your Experian report, so keep that in mind. If you pay rent to a landlord that does not report to the bureaus, consider using a rent payment service that acts as a middleman when you pay your rent, enabling them to report positive rent payment history on your credit reports.

Mix up your credit card use

A word of caution – don’t fall in love with one credit card! Instead, spread your purchases over several cards to keep your individual card utilization factor low. And try to not charge above 25% of your credit line – super scorers keep utilization in the single digits.

Consider a passbook loan

You could also take out a passbook savings loan, especially if you are light in the credit mix department. While this only accounts for 10% of your overall score, it helps creditors to see that you can handle both fixed and variable payments. People with thinner files can certainly benefit from this practice.

Passbook savings loans enable you to use your own money so you don’t have to worry about accumulating debt. Just be sure that the loan will be reported to the credit bureaus. If so, it’s a win-win proposition.

Do These Letters Work?

There are no assurances or guarantees when sending these types of goodwill adjustment letter requests; however, they are worth the effort. Some lenders reply to consumer disputes stating that they have policies against granting these and other goodwill letter requests—but others may not.

Time Frame for Removal of Credit Entries

Currently active accounts in good standing


Closed accounts that were paid (settled account)

10 years

Late payments or missed payments

7 years

Unpaid collection accounts

7 years

Bankruptcy (Chapter 7)

10 years

Bankruptcy (Chapter 13)

7 years

Hard credit inquiry

2 years

Based on the above data, often a consumer may choose to simply wait it out until the negative entry is due for removal from credit bureau reports. Keep in mind that it might take a few months for all the credit bureau reports to be updated after reaching these limits.

How a closed account might affect your credit

The effect of account closure on your credit depends on multiple factors, including the amount of available credit you’re using, the length of your credit history, the status of the closed account and the accounts that are still open.

Here are a few things to watch out for when an account is closed.

Your credit utilization may increase

Your credit utilization rate is the portion of revolving credit you’re using compared to how much you have available — generally expressed as a percentage. If you close a revolving account, such as a credit card, the total amount available decreases.

When that happens, your credit utilization could increase, which may lower your credit scores. In general, most experts recommend keeping your rate below 30%.

Closed accounts may stay on your credit reports for up to 10 years

One of the factors used to calculate your credit scores is length of credit history — the longer the better. Old accounts in good standing remain on your credit reports for up to 10 years, which may increase the average age of your accounts and improve your scores.

But when the account falls off after 10 years, the length of your credit history may decrease, which could cause a temporary drop in your scores.

On the flip side, if you have a closed account with a negative history, such as delinquencies, the derogatory information in many cases will remain on your reports for seven years. While it’s there, it will negatively affect your credit history, but the impact on your scores can diminish over time.

Your credit mix may change

Using a mix of different types of credit may have a positive effect on your credit scores. If an installment account, such as a car loan, falls off your credit report, leaving only revolving accounts, or vice versa, your credit scores might drop.

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Why do closed accounts stay on credit reports? 

Both open and closed credit accounts stay on your credit report because they are a crucial factor in calculating your overall score. 

Your report contains a lot of detailed information about your financial behavior, including your expenses and, most significantly, how you handle any money you've borrowed. 

The three major credit bureaus, Experian, Equifax, and TransUnion, constantly amalgamate this data to produce your score. For consumers, the credit reporting agencies are there for educational purposes so you can stay abreast of the state of your financial health. For creditors, the information generated is used to help them determine creditworthiness in regard to significant ventures, like applying for a mortgage or a car loan. 

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