The Do’s and Don’ts of Closing Old Accounts

We generally make money when you get a product (like a credit card or loan) through our platform, but we don’t let that cloud our editorial opinions. Learn more about how we keep this compensation from affecting our editorial views.

The Do’s and Don’ts of Closing Old Accounts

Closing old and unused credit accounts can help you avoid unnecessary fees and guard against identity theft. However, it can also cause your credit score to drop if you aren't careful. Here are a few do's and don'ts for closing those dormant accounts:

Do...

  • Consider closing unused cards that are costing you money. If your card has an extraordinarily high interest rate or an abundance of fees, and your provider isn't willing to lower your rate or waive some fees, you may want to consider closing the card - especially if you don't use it.
  •  

    Canceling credit accounts that still have a balance can come back and haunt you later. [Tweet this]

     
  • Be aware that you can usually cancel accounts that have an active balance by asking your creditor to close the account to new charges while you continue to pay down the balance each month. This may be a good way for heavy credit users to prevent new spending while they are reducing their balances. However, watch out for additional fees.
  • Aim to keep some accounts open. This is generally recommended to keep your credit score and debt balances healthy. Signs of active and responsible credit use are viewed positively by creditors.
  • Remember to check your credit reports for updates and errors after you close accounts. You should generally wait 30 to 60 days for the creditor and credit bureaus to update your records. While the accounts and their payment histories may stay on your report for seven or more years, the status should be updated to reflect that they are closed.


Don't...

  • Close the oldest account on your credit reports. This could cause your credit history to appear shorter, which may harm your credit score.
  • Just throw away old cards and expect your accounts to close automatically. The safest way to close an account is to send a certified letter to the customer service department of the creditor. Typically, you should receive an account closing confirmation letter in 10 days.
  • Be pressured to cancel several accounts all at once. If you want to cancel numerous credit accounts, spacing the closures over time could reduce the chance of attracting negative suspicion from potential creditors.
  • Over-consolidate balances onto one card. A good rule of thumb is to keep your credit balances under 30 percent of your available limits if possible.

If you have any more questions, head over to our Community, where you can ask other Credit Karma members about various financial topics.

Editorial Note: The opinions you read here come from our editorial team. While compensation may affect which companies we write about and products we review, our marketing partners don't review, approve or endorse our editorial content. Our content is accurate (to the best of our knowledge) when we initially post it, but we don't guarantee the accuracy or completeness of the information provided. You can visit the company's website to get complete details about a product. See an error in an article? Use this form to report it to our editorial team. For questions about your Credit Karma account, please submit a help request to our support team.

Advertiser Disclosure: We think it's important for you to understand how we make money. It's pretty simple, actually. The offers for financial products you see on our platform come from companies who pay us. The money we make helps us give you access to free credit scores and reports and helps us create our other great tools and educational materials.

Compensation may factor into how and where products appear on our platform (and in what order). But since we generally make money when you find an offer you like and get, we try to show you offers we think are a good match for you. That's why we provide features like your Approval Odds and savings estimates.

Of course, the offers on our platform don't represent all financial products out there, but our goal is to show you as many great options as we can.

All Comments

Results 11-20 of 720Results per page: 5 | 10 | 25Page 2 of 72   Previous | Next
1 Contribution
2 People Helped

Helpful to 2 out of 2 people

This metric is a crock of horsehsit!

1 Contribution
2 People Helped

Helpful to 2 out of 2 people

That just happened to me. This is the second car I have paid off in the past 14 mo. My score dropped. I have a 100% on time payment history with car loans & credit cards. But my score keeps dropping because I pay them off. Crazy.

Top Contributor

Reply by
CourtFraudVictim

14 Contributions
14 People Helped
Helpful to 1 out of 1 people

The "system" is designed by Scumbags.  It is designed NOT to reward you, but to PUNISH you anytime you do anything postive, including USING CREDIT LINES and PAYING OFF ACCOUNTS.  You know why?  These scumbags ( lawyers ) make MONEY by rationalizing "YOU'RE ****ED IF YOU DO AND YOU'RE ****ED IF YOU DON'T".  A Christian methodology would be, "Payment history".  Period. 

******bags conjure up alternative ANTI-CHRISTIAN practices.  Welcome to Amerika.  Led by Nazis who will steal from you, and deny you opportunity.  Stop electing lawyer scum.  These ******bags perpeuate "judicial immunity" past 1776 . It's British tyranny.  Just so you know who's behind all of the bull****.  Lawyers.  Stop electing them.  Then abolish "immunity" and replace it with "qualified immunity".  Then all of this con artist stuff stops.

1 Contribution
843 People Helped

Helpful to 843 out of 927 people

Does student loans bring your credit score down even though they are deferred?

Reply by
devbo2

1 Contribution
86 People Helped
Helpful to 86 out of 109 people

It doesn't seem to affect the score that much. On my report, they say that the reason I have high credit is because I don't have any installment loans even though under the installment loan section, it lists my student loans. I now have 2 student loans in the deferment phase ($7500+$2750) with a credit score of 763 and I'm 21 so my credit history is less than 3 years total. Using this information, it seems to indicate that student loans don't affect the credit score too much.

Reply by
keela2010

2 Contributions
13 People Helped
Helpful to 11 out of 16 people

To improve your credit score, you need to make monthly payments so that it shows "goods pymt history". Things like this boost your score!

Reply by
emilyharvey0

2 Contributions
8 People Helped
Helpful to 7 out of 7 people

I have heard that student loans don't affect your credit score as much as a revolving account (credit cards). However, when you go to buy a house, they will still take in to consideration how much your monthly payment WILL be and that could affect your interest rate.

If I were you I would contact a lender to see what they suggest (if you are house shopping, anyway).

Reply by
dmoreland2

3 Contributions
6 People Helped
Helpful to 4 out of 6 people

no, student loans are a good thing to have on a credit report since you are not missing payments. once you start your repayment process it will look excellent on your credit report because it will show u can pay off a loan.

Reply by
Kathleen

1 Contribution
4 People Helped
Helpful to 4 out of 5 people

A deferred loan is still money due in the future.   It's an obligation to the borrower.  But it doesn't mean it will lower the credit score.   Having an income, how many credit cards and balances and how timely you pay your bills will determine your overall credit score. 

Reply by
christiancho

1 Contribution
0 People Helped
Helpful to 0 out of 1 people

Students loans affect your credit score by (1) increasing the number of accounts in your credit history, (2) allowing you more of a chance to make payments to show credit worthiness, and (3) (this is indirect but could be a powerful tool) giving you an opportunity to take out student loans to pay off credit card balances at much lower interest rates.

Top Contributor

Reply by
stretch20004

19 Contributions
6 People Helped

yes it does my wife didn't pay a loan and sure enough it was on her credit report as unpaid....pay it and you won't have a problem.

Reply by
rainingsweet

1 Contribution
0 People Helped

No. It does not bring the credit score down, unless you miss the payment schedule. I have a student loan and I haven't had any negative impact on my credit score.

Reply by
rosiebean17

2 Contributions
0 People Helped

 I really haven't seen a change in my scores since I have had my student loan

Reply by
frannyd22

1 Contribution
2 People Helped
Helpful to 2 out of 2 people

I have open deferred student loans, I've just paid off my three credit cards between $1,000 and $1,500 each, and my score went up by nearly 100 points.

Reply by
MOMSTWINS

3 Contributions
8 People Helped

Student loans raise your credit.  It's considered an investment.

Reply by
debora1977

1 Contribution
0 People Helped
Helpful to 0 out of 2 people

dont have a student loan

Reply by
pinksakura12

1 Contribution
0 People Helped

Great question devrab....I was going to ask the same question!

Reply by
jwerkmanohio

1 Contribution
0 People Helped

No

Reply by
bigmomma252

1 Contribution
0 People Helped

i wondered that same thing.

Reply by
poodlekiss1922

2 Contributions
8 People Helped
Helpful to 1 out of 3 people

I'm not an expert, but I do have pretty good credit.  I think student loans that are in deferment help your credit score.  They help because they read 'paid as agreed' while they are in deferment, and having accounts in good standing helps your credit score. 

Reply by
shithead99

1 Contribution
0 People Helped

I recently took a student loan and it raised my score by 9 points

Reply by
audra1234

2 Contributions
0 People Helped

NO.

1 Contribution
0 People Helped

Yes!

Reply by
peteangelin

1 Contribution
0 People Helped

no.  however, If you intend to purchase a home, some lenders will use 1% of the total student loan balance.  If this happens, you will need to consolidate your loans and make payments as you would a credit card.

Reply by
irene40read

1 Contribution
0 People Helped

no, mine has been in forbearance for about 15 yrs. and it has not affected by score

Reply by
aimajin

1 Contribution
0 People Helped

I believe so because that is the problem i am having right now. When i go to my loan account, it says i don't owe wil December because i got a defferment, but for some reason it's showing on my credit as not paying...

Reply by
yendihunt

8 Contributions
15 People Helped
Helpful to 6 out of 7 people

GOVERNMENT ISSUED (stafford/perkins) Student Loans are not credit based, they will not bring your score down or up, however if you go in default on your student loans, this will show on your credit report. So no, as long as you pay them after your deferment is over, your credit score will not drop.

Reply by
ivopavlov

1 Contribution
0 People Helped

No. Only if you make late payments.

Reply by
wittingsun

2 Contributions
1 Person Helped

No, student loans have no impact if they are deferred, but the longer the deferred status you won't get the history reflected in your score that accounts for you making payments on time.

Reply by
gsarti

1 Contribution
0 People Helped
Helpful to 0 out of 1 people

No, your account will be reported as "current" when you're in a deferment. Deferments keep your score from going down and prevent you from default. So don't forget to set them up[!

Reply by
Txtrukr

1 Contribution
0 People Helped

I' am pretty sure they do. I have the same issue on this end. Thats why I' am here now.

Reply by
prometheus2wise

1 Contribution
2 People Helped
Helpful to 2 out of 2 people

Not necessarily.  While student loans could have an effect on granting you credit, since they aren't  revolving (like a credit card), they don't have a large effect on your score.  If they do, it'll be minimal.  If anything, it provides a good source of payment history when you start paying them.  Don't focus on your score too much, because a good lender won't.

Reply by
bzanca13

1 Contribution
0 People Helped

no

Reply by
JMalone278

1 Contribution
0 People Helped

I also had a student loan that was deferred and I did notice a low credit score because I still had an outstanding balance on my credit history and it looks bad to future creditors once they see a deferred student loan because it tells them if you cant pay your student loan how are you going to pay on a new credit loan.

Reply by
bear768

6 Contributions
8 People Helped
Helpful to 1 out of 1 people

i applied for car loan when the bank saw i  owed student loan they avageage the monthly income againsl payments they  were not going to approve me but wheni showed them it was defferred they did but my score has not been affecteded and i owe 30,000

Reply by
MetherMakela

3 Contributions
4 People Helped

Real Estate Investing Mentors have taught me to Rotate Credit Accounts; useing an average of 2 actively at any one time.  Call bank at end of 6 months & request higher limit, then request LOWER Interest rate for loyalty & responsible use; especially if you have been offered better rate by another company.  Then "Retire" [ I did not say close ] those two accounts ] and begin to use 2 other accounts.   This method is win-win. 1. You are NOT running up huge limits; if you are a wise steward of your Income and Outgo. 2. You are useing your % ratios wisely, even though you may have more than a few accounts open.  3. Showing steady usage while keeping your Credit Score healthy and growing.  4. Does NOT red flag your creditors causing them to think you are spending to fast and furious or in Financial Trouble; while preventing them from thinking

you are in Financial Trouble because you have to much credit or are closing accounts.  The face of Credit has changed dramatically over the past 4 years particularly.  Credit is STILL your "Good Name" when it comes to owning your own home, buying a car, sending your children to college.  Since the new bankruptcy laws were put in place Bad credit has changed also.  It really never goes away, but is contracted out to Collection Agencies over and over and over.  Proving you have PAID the bill in full is a nightmare that can follow you for years if not the remainder of your life..........

Reply by
elishamb

2 Contributions
3 People Helped
Helpful to 2 out of 2 people

yes they will and don't let anyone tell you different!!  Also if you miss one payment after the defferral stops the will start the charge off process and sell you loan and after you start making your payments thru someone else their damaging information will continue hurting your credit for the next 7 to 10 years after deferred account payments start!!  THANK YOU SALLY MAE and THANK YOU ECMC!!!!!  Direct Loans is helping me to take care of the account and consolidate everything and gave me low $50 a month payments without interest for 8 more years!!  Then it should all be cleaned up and credit report in better standing, but went from 820 to 579 thanks to deferred student loans, but time is on my side.  Also I can hope that it taught me a lesson, and don't put of too tomorrow what should be paid today even if they say it's ok!!!! If I would of needed my credit right after school, I would of been screwed. So watch yourself if wedding bells are in your near future, and take a job to make even a small payment of some type $25 a month is better then nothing, and I  promise you will thank me for this one day!!!!

Reply by
1943cookie

1 Contribution
0 People Helped

Does student loans bring your credit score down even tho they are deferred?

Reply by
dcgmoo

1 Contribution
242 People Helped
Helpful to 242 out of 266 people

It affects your score, but whether it helps or hurts depends on your other credit situation.  My fiance is in school and a CreditKarma user, and seeing as how many people liked this I figured I'd reply so anyone who sees it later and wonders can read it.

PROS:

- Does show as an active account, so your number of accounts is helped

- Listed as an installment loan, so if you only have credit cards (no loans or mortgages, which is typical for college students) then it helps the variety of accounts

CON:

- It's listed as a balance that is 0% paid, so it does hurt your credit utilization.  If your credit cards have low balances, this won't hurt you too bad and the account/variety will counteract it.  But if you have high/maxed credit cards, then your debt will go up and your utilization will get worse, so it might hurt a bit.

It's a fabulous starting point for future credit building for students and people with low/no credit, as it's an installment loan with guaranteed approval which can be hard to obtain.  If you make payments on-time after graduation, it can be the starting point to the fabled 750+ level before you turn 30.  But if you have trouble with keeping your credit card balances low then it can hurt your credit in the short term, as it does affect utilization which is 30% of the score.

Reply by
arepic

5 Contributions
0 People Helped

Hello, I am not an expert, but from my experience (with $300,000 in student loans), student debt does not affect your credit score #, however credit cards do look at all of your types of debt when considering you.

Reply by
aundreaxm

1 Contribution
0 People Helped

Not sure if anyone responded to your question but no student loans that are deferred don't bring your credit score down. How do I know well because I have a deferred student loan as well and my credit score is fine.

Reply by
deltachisac77

1 Contribution
0 People Helped

If deferred they should have little to no effect on your credit

Reply by
MerryLW

1 Contribution
0 People Helped

I hope not. I have over $200K on a doctorate. Does anyone know the answer to this one?

Reply by
ScottyLDS

1 Contribution
0 People Helped

I don't think so.  Those type of accounts are usually considered "in good standing" and do not negatively effect your score as an adverse or negative account that went to collections would.  The only negative side to student loans is that if you aren't working, and you are going to school full time (like I have been) and you have accumulated a great deal of loans, it makes it practically impossible to get a non-federal loan or credit card because your debt-to-income ratio is too high.  I tried to get a low-interest loan from Citi Financial in order to pay off a ridiculously high-interest loan from GE Capital (which I would advise never doing business with), and they couldn't grant my request because of my debt-to-income ratio.

Top Contributor

Reply by
bpround

19 Contributions
39 People Helped
Helpful to 2 out of 2 people

FEDERAL Student loans harm credit in these slight ways:

* New account, thus diluting overall account age

* Adding the your overall indebtedness, thus making credit utilization higher on the balance (especially if the loan exceeds the original balance)

* As long as you PAY MORE THAN MINIMUMS on loans, your credit might drop.  However, you will bounce back as soon as balances drop.  We are built oin a credit society.

AVOID PRIVATE STUDENT LOANS!

Reply by
akire332

1 Contribution
0 People Helped

No it doesn't...at least not yet. Your credit score is based on payment history, among other things. If you are not yet making payments then there is nothing to report. Your student loan issuer knows this. It is noted in your file when you are to start making payments and from THAT point on, if you fail to make payments or whatever they will report it and THEN it will affect your credit score. Right now it might actually be helping your credit score without even doing anything yet because it is considered an installment loan, which is very good as far as credit is concerned.

Reply by
milz09

1 Contribution
0 People Helped

No

Reply by
hesterly28

1 Contribution
2 People Helped
Helpful to 2 out of 2 people

yes they do because they are a liability

Reply by
lmdawley

2 Contributions
0 People Helped

I paid off my student loan this month, and my credit score dropped 16 points.  They don't like that I'm closing my credit accounts!

Reply by
tamariajoy78

1 Contribution
0 People Helped

NO! They can not properly be considered as credit or bad because they are deffered or forebeared its only when its defaulted you see the effect

Reply by
rwg63

1 Contribution
0 People Helped

Yes; this will affect your credit score very much, don't deferre any payment unless you are in dire need of it...

Reply by
ohme79

1 Contribution
0 People Helped

i asked the lady that does my taxes this last year and she told me as long as the loan stays deferred it will not bring your credit score down , but once they are no longer deferred do not fall 2 or more months behind on your payments like i did they will report it and it knocked my score down almost 50 points

Reply by
clearwater07

2 Contributions
40 People Helped

How about getting your credit score up to 800-900 then 0 out your cards-use cash VOIOLA!

Reply by
angelo11

1 Contribution
0 People Helped

if u dont pay them off! YES!!!!

Reply by
pipes229

1 Contribution
0 People Helped

Deferred Student Loans have very little to no impact on your credit score, however, once they come out of deferment or go into forebearance, they can cripple your score if you dont stay on top of them as they greatly increase your debt/income ratio on in a status requiring payments. Forebearance doesn't help as they simple accumulate more interest further increase your debt/income ratio.

Reply by
Gypsy13

1 Contribution
0 People Helped

NEW TO THIS SO i HOPE THIS IS RIGHT PLACE TO ASK A ?  STUDENT LOAN BALANCE WAS $15,000.00.   UPDATED, BALANCE PAID IN FULL, BUT CREDIT REPORT STATUS ON ACCOUNT IS LISTED AS CLOSED.  BALANCE PAID IN FULL SHOULD INCREASE MY SCORE.   THIS IS MY INTENTION BUT... IT ACTUALLY LOWERED MY SCORE BY LISTING ACCOUNT STATUS AS CLOSED INSTEAD OF PAID IN FULL...ZERO BALANCE.   PLEASE...CAN SOMEONE SHARE INFORMATION ON HOW TO FIX THIS!!!!!   THANKS FOR LISTENING

Reply by
lildebbie55

3 Contributions
74 People Helped

ty

Reply by
hvy916

1 Contribution
0 People Helped

My student loan help my credit, but I ensured when paying the interest was also paid.

So I sent in more if they as for $50.00 I sent in $100.00.
 

Reply by
prock251

1 Contribution
0 People Helped

no

Reply by
mytuhua

1 Contribution
0 People Helped

Just dont pay for it and it will not affect your credit. It will be buried after a few years down the road.

Top Contributor

Reply by
natetc11

11 Contributions
7 People Helped

As I entered repayment my scores stayed roughly the same other than fluctuating because of my utilization, so I don't believe they do. If anything, they help your score because it builds credit history even when deferred.

Reply by
tjthomp2903

1 Contribution
0 People Helped

Yes they do. After the payment due has been deferred it is still a good idea to try and pay the debt off and most of the time you can do so at a reduce rate and cut the owed amount in half.

Reply by
Juliet83

1 Contribution
1 Person Helped
Helpful to 1 out of 1 people

My deferred loans actually raised my credit score. They are in good standing each month that they are deferred.

Reply by
develdog

2 Contributions
3 People Helped
Helpful to 1 out of 1 people

Was this helpful? Absolutely it was.Everything about Credit Karma is helpful.Finally an organization that truly represents themselves accurately.

Reply by
Camerone9

1 Contribution
1 Person Helped
Helpful to 1 out of 1 people

only helps shows as an active account that being "paid" every month

Reply by
Kimmie1289

2 Contributions
2 People Helped
Helpful to 1 out of 1 people

As I read through some of the comments it seems that what would make perfect sense really does.  Think about this for a moment...  Typically when one pays off a securred loan or similiar type of credit line your score drops rather than increases, true.  Why?  Consumers are dooped into believing that if they pay on time every month and demonstrate responsible financial behaviors that they should be rewarded by being given a good credit score. 

This does not happen, why?  The reality of it is that virtually all banks and credit agencies WANT you to remain in debt.  Big banking has a way of manipulating the monetary system even through credit scores.  Have you ever wondered who actually owns or funds the credit reporting agancies or FICO?  Doing a liitle Google research will help get a much clearer picture of why things are the way they are.  Play the game just dont get in over your head...

Reply by
MSNCRNP

1 Contribution
0 People Helped

I just finished post graduate school and yes student loans do effect your credit score. First, student loans are not subsidized past bachelor degree and this does effect your score. Every semester starts a new loan which shows as new installment loans on your credit. I was surprised to find my credit score had dropped 167 points after graduation. The credit bureau had me with 10 installment loans and zero income. I have been working hard to correct this by having all student loans consollidated into one installment and updating my income which is considerable since graduating from NP school. My score is coming back up but is slow.

My advice is to watch your credit score and consollidate loans post graduation so it does not show up as many different installments,

1 Contribution
2 People Helped

Helpful to 2 out of 2 people

My home loan is being transfered for the third time. Not because I requested it or had any control over the lenders selling my loan. This should not count against my credit score since I have paid my payment on time and did not chose to refinance the loan.

1 Contribution
2 People Helped

Helpful to 2 out of 2 people

My wallet was stolen so all my accounts were "closed" and new cards issued.  My credit score tanked!  Can this be fixed?

2 Contributions
6 People Helped

Helpful to 2 out of 2 people

I totally agree! so disccouraging! i paid my car off early, and thus, have "no credit history" (ridiculous, inaccurate.) it's not fair! My credit score has actually never been this low, despite having paid off all my student loans and car, and making impeccably on-time payments every time. so annoying. ::; eye roll:::

Top Contributor

Reply by
CourtFraudVictim

14 Contributions
14 People Helped

Paying off debt is NOT want the scumbags want you to do.  So they punish you.  They want you to only use 30% of your credit lines.  If you use 40% they punish you.  This system was designed by a madman.  It's sadistic and nuts.

1 Contribution
3 People Helped

Helpful to 3 out of 3 people

yes this absolutely rediculious, paid off a 3yr. motorcycle loan in less than a year 10,000 and then pay off my best buy card 6000.00 (didn't close it) and my score went from 775 to 751. that just plain STUPID AS HELL. IM SOOOOOO ****ED ABOUT IT. Makes no **** sense at all. 

Reply by
willrodgers

2 Contributions
1 Person Helped

EnteLike in politics, the system is rigged.

1 Contribution
2 People Helped

Helpful to 2 out of 2 people

A few weeks ago my bank notified me of unusual credit card usage, as my credit card number was used in San Diego, CA in the amount of $200, which they took off my statement. 

Then last week someone used my credit card number in New York, NY to purchase Grubhub food over a five-day period in the amount of $730.89.  I notified the bank.  I also notified Grubhub as to the illegal use at the various restaurants, the dates of use and the amounts of each purchase.  They SHOULD be able to backtrack to where they delivered the food and find the person who used the card number and make an arrest (in a perfect world). 

I told my bank that the card should have been cancelled when the theft was made with the illegal San Diego purchase.  Doing that would have prevented the theft in New York. I received notice via e-mail that the bank cancelled my credit card.  That was six days ago and I still have not received a new credit card from them.  Due to the cancellation of my credit card my score went from 840 to 822.

So much for being a reliable person with money!

1 Contribution
1 Person Helped

Helpful to 1 out of 1 people

I got one better, I looked at my score the other day and it went from 749 to 703 and my card utilizattion went from 17% to 13 %.  Sure am glad I don't any more credit

2 Contributions
1 Person Helped

Helpful to 1 out of 1 people

I had a credit card which was tied to a dental plan.  I did not use it for two years and they closed the card [zero balance] and said I had too much debt.  I'm confused.  I just refinanced my mortgage and paid off all my credit cards, yet my score did not go up that much.  I think the entire credit score system is a fraud, based on the opinion of the three credit companies.  Who appointed these people as credit score companies anyway?

Results 11-20 of 720Results per page: 5 | 10 | 25Page 2 of 72   Previous | Next

Your Credit Scores Should Be Free. And Now They Are.

View your scores and reports anytime.

SIGN UP NOW

Comment on this Article

Write your comment:
Enter Your Comments