How to Remove a Closed Account From Your Credit Report


Maintaining a healthy credit report is essential for achieving financial success. One aspect of managing your credit report is understanding the impact of closed accounts.

This article will discuss how closed accounts affect your credit, when to remove them from your credit report, and provide guidance on how to do so.

woman working on laptop

Key Takeaways

  • Closed accounts affect your credit based on their payment history: positive closed accounts can help by contributing to your credit history, while negative ones, such as those with late payments or collections, can hurt your credit.
  • To remove a closed account from your credit report, review your credit report, dispute errors with the credit bureau, or contact the creditor for a goodwill adjustment or pay-for-delete agreement. Seeking help from a credit repair company may also be beneficial.
  • Maintain good credit practices by monitoring your credit report, keeping credit utilization low, paying bills on time, and diversifying your credit mix. Secured credit cards and credit builder loans can aid in rebuilding your credit after negative accounts are removed.

How Closed Accounts Affect Your Credit

Positive Closed Accounts

A closed account with a positive payment history and no negative marks can actually benefit your credit score. This is because a credit account in good standing contributes to the length of your credit history, a key factor in determining credit scores.

Negative Closed Accounts

Closed accounts with late payments, collections, or charge-offs can have a detrimental impact on your credit score. Negative payment history and collection accounts are red flags for future lenders, making it harder for you to secure credit at favorable terms.

Impact on Credit Utilization

Credit utilization, or the amount of credit you are using compared to your available credit, is another significant factor in calculating credit scores. A closed account with a zero balance can lower your credit utilization rate, which may positively impact your credit score.

When to Remove a Closed Account From Your Credit Report

Account Standing

When considering the removal of a closed account from your credit report, it’s essential to consider the standing of the account—whether it has a positive or negative history. This is the most important factor when determining whether the removal will be beneficial or detrimental to your credit score.

Consequences of Removing Positive Closed Accounts

Removing a positive closed account from your credit report is not in your best interest. Positive closed accounts contribute to your overall credit history, which is a key factor in determining your credit score. By removing a positive account, you may inadvertently shorten your credit history, resulting in a lower credit score.

Additionally, positive closed accounts can contribute to a diverse credit mix, demonstrating your ability to manage various types of credit responsibly. Removing a positive account, such as an auto loan or student loan, could reduce your credit mix and negatively impact your credit score.

Before attempting to remove a closed account from your credit report, carefully assess the potential impact on your credit history, credit mix, and overall credit score. It’s always better to let positive accounts remain on your credit report to showcase your responsible credit history to future lenders.

Benefits of Removing Negative Closed Accounts

On the other hand, removing negative closed accounts from your credit report can be beneficial. Negative closed accounts, such as those with late payments, collections, or charge-offs, can have a detrimental impact on your credit score. Removing a negative account can help improve your credit score, making it easier for you to secure credit at favorable terms.

However, it’s important to note that removing a negative closed account may not guarantee immediate improvements in your credit score. In some cases, the removal of an old negative account could reveal more recent negative information, which might have a greater impact on your credit score.

When evaluating whether to remove a negative closed account, weigh the potential benefits against any potential drawbacks. If the account is due to age off your credit report soon or its impact has significantly diminished over time, it might be more beneficial to focus on building positive credit habits to improve your credit score.

How long does a closed account stay on my credit report?

Positive Closed Accounts

Positive closed accounts can remain on your credit report for up to 10 years from the date of closure, helping to build your credit history. However, if the account has been closed for several years, and you have other open accounts, removing it may not have a significant impact on your credit score.

Negative Closed Accounts

Negative closed accounts generally remain on your credit report for up to seven years from the date of the first missed payment. This timeframe may vary depending on the type of account and any applicable state laws.

How to Remove a Closed Account From Your Credit Report

Review Your Credit Report

To get started, obtain a free credit report from each of the three major credit bureaus (Equifax, Experian, and TransUnion) through the Federal Trade Commission-approved website, Review your credit reports carefully to identify any errors or discrepancies.

File a Dispute with the Credit Bureau

If you find inaccurate information on your credit report, you can file a dispute with the credit reporting agencies. The dispute process can be completed online, by mail, or over the phone. Be sure to include relevant documentation, such as account numbers and proof of payment, to support your claim.

Contact the Original Creditor

If the closed account has a negative payment history, you may try contacting the original creditor or debt collector to request a goodwill adjustment or negotiate a pay for delete.

A goodwill letter is a written request to remove negative information from your credit report in exchange for your continued responsible credit behavior.

A pay for delete letter is a written agreement between you and the debt collector to remove the negative mark from your credit report in exchange for payment of the outstanding balance.

Seek Professional Help

If you are struggling to remove a closed account from your credit report, consider seeking assistance from a reputable credit repair company. These professionals can help you understand the credit repair process and provide guidance on improving your personal finances.

Tips for Maintaining a Healthy Credit Report After Removing a Closed Account

Regularly Monitoring Your Credit Report

Regularly review your credit report to ensure all information is accurate and up-to-date. Catching inaccuracies early can prevent potential negative impacts on your credit score and allow you to address them promptly.

Maintaining a Low Credit Utilization Ratio

Aim to keep your credit utilization rate below 30% of your available credit to demonstrate responsible credit behavior to future lenders. This can help improve your credit score over time.

Paying Bills on Time

Your payment history makes up a significant portion of your credit score. Consistently paying bills on time and in full can contribute to a positive payment history and improve your credit standing.

Diversifying Your Credit Mix

Having a diverse mix of credit accounts, such as credit cards, student loans, and auto loans, can demonstrate your ability to manage different types of credit responsibly. This can positively influence your credit score.

Limiting Hard Inquiries

Each time you apply for new credit, a hard inquiry is recorded on your credit report. Multiple hard inquiries within a short period can negatively impact your credit score, so it’s best to limit applications for new credit.

Secured Credit Cards and Credit Builder Loans

After removing a closed account with a negative history from your credit report, you may want to consider secured credit cards and credit builder loans to help rebuild your credit. These credit-building tools can be valuable resources for improving your credit score.

Secured Credit Cards

A secured credit card requires a security deposit, which typically serves as your credit limit. As you make purchases and pay off your balance, your payment history is reported to the three credit bureaus, helping you rebuild your credit.

To apply for a secured credit card, follow these steps:

  1. Research various secured credit card options, comparing fees, interest rates, and deposit requirements.
  2. Submit an application, including your personal information, income, and the required security deposit.
  3. Once approved, use the secured card responsibly, making timely payments and maintaining a low credit utilization rate.

Here are the best secured cards for 2024.

Credit Builder Loans

A credit builder loan is a small loan designed to help you establish or rebuild credit. Instead of receiving the loan funds upfront, the lender holds the funds in a savings account while you make monthly payments, which are reported to the credit bureaus. Once the loan is paid off, the funds are released to you.

To apply for a credit builder loan, follow these steps:

  1. Research credit builder loan options, comparing loan amounts, interest rates, and fees.
  2. Submit an application, including your personal information and income.
  3. Once approved, make consistent, on-time monthly payments throughout the loan term.
  4. After the loan is paid off, the funds are released to you, and you’ve built a positive payment history.

Here are some of the best credit builder loans for 2024.

How to Prevent Future Negative Closed Accounts

To avoid future negative closed accounts on your credit report, you need to develop responsible credit management habits. Here are some practical tips and strategies to help you maintain a positive credit history:

  • Create a budget: Develop a monthly budget that outlines your income and expenses, including your debt payments. This will help you prioritize your financial obligations and allocate funds towards paying off your debts on time.
  • Set up automatic payments: To ensure timely payments, set up automatic payments for your credit accounts. Automatic payments can help prevent missed or late payments, which can lead to negative closed accounts on your credit report.
  • Monitor your credit usage: Keep an eye on your credit utilization ratio, which is the percentage of your available credit that you’re using. Aim to keep it below 30% to demonstrate responsible credit management.
  • Communicate with your creditors: If you’re struggling to make payments, contact your creditors to discuss your options. They may be willing to work with you to adjust your payment plan or provide temporary relief.


Removing a closed account from your credit report can be a critical step in maintaining good credit health. By understanding how closed accounts impact your credit score, knowing when to remove them, and following the outlined steps, you can take control of your financial future.

Continually practicing responsible credit habits and monitoring your credit report will ensure you are in good standing with future lenders and better prepared for financial success.

Meet the author

Crediful is your go-to destination for all things related to personal finance. We're dedicated to helping you achieve financial freedom and make informed financial decisions. Our team of financial experts and enthusiasts brings you articles and resources on topics like budgeting, credit, saving, investing, and more.