Rant: My bank told me a closed credit card would 'fall off' my report in 7 years, but that's not the whole story

I was talking to a friend at a coffee shop in Phoenix last week about his credit score drop. He closed an old card and his score tanked 40 points. He said his bank told him not to worry, it would just disappear from his report after 7 years. That sounded off to me, so I looked it up. The closed account does stay on your report for about 7 years, but the big hit is immediate because it changes your credit age and available credit. My friend lost his oldest account and his total credit limit got cut in half overnight. The 'falling off' part just means the record of the closed account leaves later, but the damage to your score is done right away. It made me realize how important it is to know the timing of these things. Has anyone else gotten bad advice from their bank about how closing accounts really works?

3 comments

3 Comments

davis.dakota2mo ago

Kept mine open with a tiny monthly charge.

davidh882mo ago

That "tiny monthly charge" idea is smart. I did something similar with an old gym membership, paying just five bucks a month to keep the grandfathered rate. It felt silly at the time, but it saved me a fortune when I finally started going again.

cole_walker2616d ago

Rereading that you kept the membership open for five bucks a month - wow, that's practically nothing. I've got a couple of old accounts I'm still paying for that I keep meaning to cancel, but they're like four or five bucks each too. It adds up over a year though, you know? Like 60 bucks a year to hold onto something you might not even use. Still, if it saved you a bundle in the long run, that's a win. I'm just impressed you actually remembered to keep paying it all that time - I'd probably let it lapse by accident.