Are closed accounts automatically deleted?
On the road to building or repairing our credit, we may encounter certain myths about credit, and one of them may be whether or not closed accounts really affect our credit and are automatically removed.
The truth is that accounts that have been closed due to payment or transfer to another lender are not automatically removed from the credit report.
Now what is true is that the status of the accounts is updated to show that it is no longer open, but the payment history of the account will remain on the report AND this information can remain on your credit report for up to 10 years.
If accounts reflect potentially negative, it is likely due to delinquencies that are reflected in the account history and will remain on the credit report for seven years.
Closing an account does not mean it will affect your credit. In fact, closing a credit card account can increase your overall credit utilization rate.
Your credit utilization rate measures the amount of total available credit you are using on your revolving accounts and is an important factor in most scoring models. When you close a revolving account, you lose that credit limit.
What you can do is have your utilization rate increase if you still have balances on other accounts.