When does good credit leave your credit report?

[genchan]

I know that it takes 7 years for bad credit to move out of your credit report. How long does it take for good credit to leave your credit report. Does it disappear after 7 years, too?

[HelloImnew]

I believe in some states, I believe that the rating may stay on for 10 years.
Anyway, that is a great question. As soon as one is late paying a bill, for instance, one gets a baddie on the reports. As long as one pays on time, and follows the guidelines (per ex. not opening too many credit card accts) once should keep their good standing.
The credit bureaus are worst than the IRS! They have too much power!:angry-smi

[akaivyleaf]

Seems like my good credit leaves pretty quickly. I financed a car, paid it off on time, monthly and so of course the monthly report was good. But it left my credit report in under a year after it was paid off. Made it look like I hadn't financed anything.... I noticed when it was paid in full, the next 3 months it went to a closed account as it rightly should have. But 6 months after... it completely disappeared. No history of my payments...no nothing.

[terry1156]

With credit cards, you have some control on when it leaves. As long as you credit account remains open, even if you don't charge anything on the card, then it will remain in your account. Even better, buy at least one item a year and pay it off so it looks active. many people close old credit card accounts and this can erase good points in your credit report.

[genchan]

Let me know if I understand this correctly. If I leave accounts open then I keep the good credit but if I close them, then the good credit disappears? So I should keep my credit card accounts open even if I don't use them so I don't lose the good credit? Is that right?

[akaivyleaf]

Here is how I understand getting and keeping a good credit score. This is from the constant pounding of advice from both Dave Ramsey and Clark Howard and even Suze Orman. Let me use this example.

Say for instance you have 2 credit cards, with a combined AVAILABLE credit of 10,000. You charge 2500 on each card for a total of 5000. Well you have spent 50% of your available credit so your debt to credit ratio is 50%.
Same scenario with a twist. You pay off 2500 on one card. Your debt to credit ratio is now 25%. You're looking better credit wise. But you turn around and close that account. You're back to 50% now. Instead of having 10,000 available you're down to 5000 available.

Creditors look at your spending potential when deciding if you're a good risk or not. While you might not charge the entire 10,000, you have the potential to do so. Do they want to add more to that available line? Thereby increasing your credit to debt ratio? But that doesn't necessarily mean that since you have a "high" line of available credit, that its good. Most creditors look at it unfavorably in terms of how the higher your available credit, the lower your overall credit score.

Some accounts you can't keep open like car loans, once you pay off that account, its closed, but you do have more le-way with credit cards. Them some lenders look at the types of credit you have... revolving AKA Credit Cards (the most volitile because you can get a while hair and go shopping), Mortgages, installment loans (car loans and others with fixed terms) and each of these has factors that determine whether they are "good" credit or not.

Does my explanation make sense?

[terry1156]

You also need to be careful of the length of time you've had the accounts open. You don't want to close your longest running account because that will instantly shorten your credit history. If you have a card you've had for 10 years and one that you have only had a year, but you only use the newer card, closing the old card is a bad idea. If you do, your credit history goes from 10 years of good credit to 1 year.

[genchan]

Originally Posted by akaivyleaf

Does my explanation make sense?

Yes, very clearly. Thank you. So good credit leaves fairly quickly once an account is closed. If bad credit stays on 7 years, I think good credit should stay on at lease 7 years too, but my hoping isn't going to make it happen.

The place where you can control good credit a bit is with credit cards. That is good to know.

[PrincessPerky]

Speaking of credit cards, we have a lot of open accounts. I know we shouldn't close the oldest one, but will it hurt to close a couple of others? A lot menaing one in use (ouch) and 6 or 8 others just collecting dust in the house . I want to close some of them just so they are not availible to be stolen, but my husband says that looks bad on the credit report.

[akaivyleaf]

if you want to close any, as on the advice of terry1156, close the newest, or close the one with the smallest total credit line.

[terry1156]

Originally Posted by PrincessPerky

Speaking of credit cards, we have a lot of open accounts. I know we shouldn't close the oldest one, but will it hurt to close a couple of others? A lot menaing one in use (ouch) and 6 or 8 others just collecting dust in the house . I want to close some of them just so they are not availible to be stolen, but my husband says that looks bad on the credit report.

If you are paying year ly fees on the cards, then it may be worthwhile to close the ones that you are getting charged for since you are not using them. If you do want to close accounts, the best time to do it is when you have no balances on other cards. If you are only worried about using them, cut them up. Then you can't use them and your credit rating is not effected.

[PrincessPerky]

Thanks

[genchan]

Another question. If you close an account and it disappears, if you close an account that had late payments, do those late payments also disappear?

[akaivyleaf]

All of this is dependent on the account owner...not you, the creditor. Sometimes you can close an account and it stays there- whether you had late payments or not. Other times once its closed, its poof wiped out.

Yes you can close your account with the company, you always have that right, but they ultimately have the final say so on the credit report. You can put a 100 word statement next to the account, but I believe the three major credit bureaus will notate the account "Closed by consumer"


The History, whether payments are late or not, will stay as long as the account- closed or open- remains on your credit report.

[genchan]

Originally Posted by akaivyleaf

All of this is dependent on the account owner...not you, the creditor. Sometimes you can close an account and it stays there- whether you had late payments or not. Other times once its closed, its poof wiped out.

Is there a way to know this before you close the account? Maybe by looking for something in the credit report?

[terry1156]

I don't believe so. I may be wrong, but I don't ever remember reading anything about that.

[akaivyleaf]

Originally Posted by genchan

Is there a way to know this before you close the account? Maybe by looking for something in the credit report?

No way that I've been able to tell... But you might puruse some other sites like myficoscore.com or suzeorman.com or clarkhoward.com they might be able to speak to this. Although, I do feel that its up to the company. Even a call to the company might answer this question better than anybody else.