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Member Since: January 2009
Closed accounts will still show on your credit report for up to 10 years from the date of closure before it is removed from your credit report.
SaddieTaz's response was:
You have to understand why inquiries show on your credit report. There are two types of inquires, often called hard inquiry and soft inquiry. When you apply for a credit, there will be a hard inquiry pulled by the creditor to review your credit worthiness. Such inquiry will drag down your credit score and cannot be removed unless you prove that it is an error. If you pull off your own credit report, such inquiry will be a soft inquiry and will not affect your credit score. All inquiries will stay on credit report for upto 2 years.
It depends on your bank's discretion. Most banks allow closed accounts reopen within 3 or 6 months. If your account is closed more than a year, I doubt the bank will ever reopen it again. Also, some banks such as AMEX will charge a fee for reopening a closed account. In your case, it sounds like you forfeited your right and thus closed it. It will be even more difficult to have the bank reopen the account for you.
When you mean "renew", I suppose you mean you have to pay an annual fee for the card. If you don't want to pay the annual fee again next year, you'll have to close the account.
1. Yes, it will lower your credit score if closing the account because by closing the account,
a) it will shorten the average life of your credit
b) it will lower the utilization rate
These are two major factors affecting the credit score. However, if your card was not opened long ago, and the credit limit is not relatively high, I doubt it will have a noticeable imapact to your credit score.
2. As stated earlier, if you decide not to pay the annual fee for the upcoming year, the account has to be closed. A closed account will stay on your credit report for 10 years, not 2 years as you said. But since your credit file and score will change almost every single month, if you believe this account is not worth remained opened, then go ahead and close it. You can always boost your score on somewhere else.
Chapter 13 bankruptcy remains on your credit history for 7 years. Chapters 7 and 11 are reported for 10 years.
Closing a credit account may shorten the average years of credit history of your overall accounts which may lower your credit score. Also, closing a credit account may cause a higher credit utilization which may lower your credit score as well.
A new account will report to credit bureaus and thus shorten the average life of your overall credit. Closing it subsequently does not help since the damage is already done. Say you have a credit card account with $1,000 credit line/10 years history. Now you open a new credit card account with another $1,000 credit limit. So you have overall credit for $2,000 with average life of credit history 5 years. Then you close the new account and now you are down to $1,000 overall credit but with 5 years of credit history.
If you believe there is an error on your credit report, you can dispute it with the credit agencies. The credit agencies will then contact the creditor to verify the dispute. Once the error is confirmed, it will be removed on your credit report.
A new credit application will result in a hard inquiry pulled by the creditor. A hard pull most likely will cost you 3 to 10 points to your credit score. If you are not applying a mortgage soon, don't pay too much attention to your credit score unless your score is way too low. There are many signup bonus deals on credit card floating around which rewards you as much as $500. It is definitely worth 3 to 10 points of your credit score. Remember, do not apply for a new card if you don't even think you will be approved and waste a hard pull, however.
It usually takes about a month to take them off your credit report. If they are still showing up on your credit report, file a dispute with the credit bureau. The credit bureau will contact the card issuer to verify your dispute. Once confirmed, they will contact you and send you a new copy of your credit report.
Absolutely. While credit utilization is calculated on revolving credit lines which affects your credit score, it is no negative impact to installment loan balance. As long as you make timely monthly payment to your installment loan, your credit score will definitely improved.