How do I have old credit card accounts that are long ago closed or paid off removed from my credit report? I know that my score is negatively affected because of so many "open" accounts!
- EDC
Dear EDC,
Your credit report reflects your account history. Therefore, credit card accounts remain on your report for a set period of time—even after they are closed and paid off. The number of open accounts on your credit report will not directly harm your credit scores.
Check Your Credit Reports
If you haven't already, check your credit reports to verify the accounts are being reported as closed. Even if you think you closed them, they may still be listed as open in your creditors' records. That may not be a bad thing. Your credit utilization ratio—the amount of available credit you're using expressed as a percentage—is the second most important factor in credit scores. The lower your utilization, the better. Having open accounts gives you a higher overall credit limit, which can lower your utilization ratio and help improve your scores.
Even if they do show as closed, any account closed in good standing (meaning it has no late payment history) will remain on your credit report for 10 years. As long as the positive information remains, it contributes to a stronger credit history. So, removing those accounts early actually could be harmful to your credit scores.
If late payments were ever made on an account, they'll remain on your credit report for seven years. Closing the account won't remove the late payments any sooner. Once the late payments reach the seven-year period, they are automatically removed. An account closed while delinquent will remain on your credit reports for seven years after its original delinquency date—the date of the first missed payment after which the account was never again brought current.
Accounts with negative information remain on your credit reports for a shorter time than accounts in good standing. Keeping positive accounts on your credit history longer helps you rebuild your credit faster if you've had problems in the past.
Order Your Credit Scores
Your credit scores are separate from your credit reports. Ordering your credit score can give you valuable insight into what specifically is impacting it and what you can do to get your numbers up. You can get your FICO® Score☉ online for free from Experian.
When you get your credit score from Experian, you will also get a list of the risk factors that should help you understand what elements of your credit history are hurting you the most. Improving on these specific risk factors will help you improve your credit overall.
How to Improve Your Credit
Even without knowing the risk factors, there are certain things anyone can do to begin improving their credit scores right away. Here are a few:
- Bring any past-due accounts current. The most important factor in credit scoring is whether you pay your bills on time. If you have any accounts that are past due, bringing them current is the first step to getting your credit back on track.
- Pay down your credit card balances. Since your utilization ratio is the second most important factor in scores, paying down the balances on your revolving accounts will likely have a positive impact on your scores. The lower your utilization rate, the better, and below 10% is best.
- Sign up for Experian Boost®ø. Experian Boost allows you to add your positive utility and cellphone payments to your credit, going back as far as 24 months. This is especially beneficial for those who have a limited credit file, also called a "thin file."
Thanks for asking.
Jennifer White, Consumer Education Specialist