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Paying of closed account or not

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henrikandersen
Established Member

Paying of closed account or not

Will it boost my credit to pay off a closed credit card account or should I pay off monthly and build a longer credit history even though I know that I will be paying money on interest. Will it finally get to the same score just a little longer if I paid off over longer period or will it actually be boosted by paying it off quicker???
I have some late payments on this account so think it is better to pay it off slowly to show a improved payment history...
Message 1 of 5
4 REPLIES 4
aurelie00
Regular Contributor

Re: Paying of closed account or not

Your closed account is still factoring into your utilization...so it's probably better to pay it off.


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Current Score: 715
Goal Score: 720


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Message 2 of 5
pizzadude
Credit Mentor

Re: Paying of closed account or not

 

The account will be included in your revolving utiilzation if both the balance and credit limit are non~zero; also once the account is paid to zero you'll lose the CL ( assuming it is being reported now ) so your overall utilization might increase.     Depending on how it is impacting your utilization, you might want to keep it open.

March2010 FICO® ~ 695 TU, 653 EQ, 697 EX
Message 3 of 5
henrikandersen
Established Member

Re: Paying of closed account or not

But what about payment history? My payment history will be weaker if I pay it off quicker when I have a couple of late payments, right?

Will my fico score be different if I pay it now or pay over one year? Will it end up at the same number?
Message 4 of 5
pizzadude
Credit Mentor

Re: Paying of closed account or not


@henrikandersen wrote:
But what about payment history? My payment history will be weaker if I pay it off quicker when I have a couple of late payments, right?

Will my fico score be different if I pay it now or pay over one year? Will it end up at the same number?

Your main concern is the FICO scoring impact of the utilization ~ the late payments have already done their damage and will just have to age over time in order for your score to improve.     Making positive payments won't offset the negative payments from a FICO perspective.

 

March2010 FICO® ~ 695 TU, 653 EQ, 697 EX
Message 5 of 5
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