As a financial advisor with extensive experience in credit scoring and personal finance, I can provide you with a comprehensive understanding of how closed accounts affect your credit score.

Firstly, it's important to recognize that credit scores are calculated using a variety of factors, including payment history, credit utilization, length of credit history, types of credit used, and new credit inquiries. Each of these factors plays a role in determining your overall creditworthiness.

When it comes to closed accounts, there are a few key points to consider:


1. Account History: Closed accounts can still impact your credit score. If the account was closed in good standing, meaning all payments were made on time and there were no outstanding balances, it will continue to contribute positively to your credit history. However, if the account was closed due to late payments or other negative actions, it can negatively affect your score.


2. Credit Utilization: This is the ratio of your outstanding credit balances to your total available credit. Closed accounts that had a high credit limit can impact this ratio. If you've closed a credit card with a large limit, it could increase your credit utilization rate if you have balances on other cards, which can negatively affect your score.


3. Length of Credit History: The age of your oldest account, as well as the average age of all your accounts, contributes to your credit score. Closed accounts, even if they are no longer active, can still contribute to the length of your credit history. This is beneficial as a longer credit history is generally seen as more favorable.


4. Closed Accounts on Credit Report: Closed accounts will remain on your credit report for a certain period of time. As you mentioned, closed accounts in good standing are typically removed after about 10 years, while those with a history of late payments are removed after seven years. This timeline can vary slightly depending on the credit bureau's policies.


5. Impact on New Credit: When you close an account, it can also affect the "new credit" factor of your score. This is because closing an account can lead to a decrease in the average age of your accounts and an increase in the number of recent credit inquiries if you've applied for new credit.

6. **Closed Accounts and Credit Score Calculation**: Closed accounts can still be factored into credit score calculations. They contribute to the payment history and the length of credit history components of your score. As long as the account was closed without any negative marks, it can continue to positively influence your score.

7.
Monitoring Your Credit: It's crucial to monitor your credit report regularly to ensure that all information is accurate and up-to-date. This includes checking for any closed accounts and ensuring they are reported correctly.

In conclusion, while closed accounts do continue to affect your credit score, the impact can be both positive and negative depending on the circumstances surrounding the account's closure. It's essential to manage your credit responsibly, make all payments on time, and maintain a healthy credit utilization rate to ensure a positive credit score.

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While your score will continue to include account history from all closed, as well as open, cards for as long as they remain on your credit report, the credit bureaus remove closed accounts in good standing after about 10 years and closed accounts with a history of late payments after seven years from the date of the ...Apr 5, 2018read more >>