Credit glossary
Closed account
An account that can no longer take new charges, closed by you or the lender, which can remain on your credit report for years.
Closing doesn't erase history. Experian says a card closed in good standing generally stays on your report for up to 10 years, and FICO keeps counting it toward your length of credit history while it's there. Negative details follow the 7-year rule instead. Card issuers don't have to give advance notice when they close an account under Regulation Z, so an unused card can be shut down without warning.
The immediate effect of closing a card is on utilization. Its limit drops out of your available credit, so balances on other cards become a bigger share of a smaller total. A product change to a no-fee card often avoids that. A paid-off loan is different: it closes automatically, and Experian says any score dip from that is usually small and short-term.
Guides that go deeper
- What closing a credit card actually does to your scoreClosing a card cuts your available credit right away but doesn't erase its history for years. See the utilization math and when closing is still the right call.
- How to keep an unused credit card from being closedIssuers can close an unused card with no warning, and the lost limit pushes utilization up. Cheap, low-effort ways to keep a sock-drawer card active.
- Why paying off a loan can drop your score (and why it's still fine)You made the last car payment and your score fell. What changed on your report, how long the dip lasts, and when the timing of a payoff matters.
Sources
- Closed Accounts and Your Credit History, Experian
- More Scoring Myths: Closing Credit Cards, FICO
- 12 CFR 1026.9, Subsequent disclosure requirements (Regulation Z), eCFR
- Why Did My Credit Score Drop When I Paid Off a Loan?, Experian
This is education, not legal or financial advice. Spot an error? Tell us and we'll fix it.