How Long Before a Closed Account Falls Off Credit?

A closed account on your credit report signifies a credit card, loan, or other credit form that can no longer be used for new charges. These accounts may have been closed by the cardholder, or the creditor. Both positive and negative closed accounts eventually cease to appear on a credit report. Understanding these timelines is important for maintaining financial health.

Credit Report Reporting Durations

Information on credit reports is subject to federal law, which establishes limits on how long most negative items can be reported. Most negative information, such as late payments or collection accounts, generally remains on a credit report for seven years from the date of the first missed payment that led to the negative status.

Positive or neutral accounts, such as paid-off loans or credit cards that were closed by the consumer while in good standing, can remain on a report for a longer duration, often up to 10 years or more after closure. These accounts provide a historical record of responsible credit use, which can benefit a credit profile. The point at which an account is closed differs from when it “falls off” a report, as the latter refers to the item no longer being visible to lenders pulling the report, rather than the underlying debt being forgiven.

Specific Account Types and Removal Timelines

Individual late payments typically remain on a credit report for seven years from the date of the delinquency. Paying a past-due balance does not remove the late payment history; it simply updates the account status.

Collection accounts usually stay on credit reports for seven years plus 180 days from the date of the original delinquency on the initial account, regardless of when the account entered collections or was paid. Charge-offs, which occur when a lender deems a debt unlikely to be collected, also remain for seven years from the date of the original delinquency.

Bankruptcies have specific reporting periods; a Chapter 7 bankruptcy typically remains on a credit report for 10 years from the filing date. A Chapter 13 bankruptcy, which involves a repayment plan, generally stays on a credit report for seven years from the filing date.

Judgments and tax liens can also appear on credit reports. Due to recent changes in reporting standards, most tax liens no longer appear on credit reports. Paid accounts with negative history, such as paid collections or charge-offs, do not disappear from the report upon payment; their status is updated, but they remain for the full reporting period from the original delinquency.

Accessing Your Credit Reports

Obtaining copies of your credit reports is an important first step to understand your credit history. The three major nationwide credit bureaus are Equifax, Experian, and TransUnion. Federal law provides for access to one free credit report annually from each of these bureaus.

These free reports can be requested through AnnualCreditReport.com. The website offers options to request reports online, by mail, or by phone. It is beneficial to review reports from all three bureaus, as information may vary between them since not all creditors report to every bureau.

Upon reviewing your credit reports, you should examine various details, including:
Account names and numbers
Dates accounts were opened and closed
Specific payment history details, such as instances of 30, 60, or 90+ days late
Balances and credit limits
Account status (e.g., open, closed, paid, charged-off, in collections)
Inquiries and public records like bankruptcies

Correcting Credit Report Errors

Federal law grants consumers the right to dispute inaccurate or incomplete information found on their credit reports. The dispute process can be initiated directly with each credit bureau that is reporting the error. Common methods for filing a dispute include online portals, mail, or phone.

When filing a dispute, it is advisable to gather all relevant documentation, such as account statements or payment records, to support your claim. The dispute should clearly identify the specific error and explain why it is incorrect. Once a dispute is filed, the credit bureau typically investigates the claim with the data furnisher, a process that usually takes around 30 to 45 days.

Following the investigation, the credit bureau will notify you of the outcome. Potential results include the item being removed, updated, or verified as accurate. If the dispute is unsuccessful and you believe the information is still inaccurate, you can contact the Consumer Financial Protection Bureau for further assistance.