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Closed accounts vs. Open accounts - Which to pay down first?

Established Member

Closed accounts vs. Open accounts - Which to pay down first?

First, I want to thank you for your quick and informative replies! I appreciate it greatly.


I am wondering what would help improve my score the most:  paying down cards that have closed my account, or paying down cards that are still open?

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Senior Contributor

Re: Closed accounts vs. Open accounts - Which to pay down first?

If it were me, I'd pay the open ones first.


Probably does NOT make a difference in scoring, and if it DOES, it'd be to your advantage to pay the open ones first.


(Sometimes when you pay off a closed account, the reported credit limit "chases" the balance down, maxing out your utilization.)

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10/01/17 Fico8 scores: EX 660, EQ 647, TU 663
01/01/18 Fico8 scores: EX 655, EQ 661, TU 650
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Message 2 of 4
Valued Contributor

Re: Closed accounts vs. Open accounts - Which to pay down first?

I would pay the ones with the highest rate(s) first or work on the ones that are the nearest to their credit limits. Keep all your acocunts current and put extra money  on the highest interest rate or the one nearest the credit lmit.

Equifax My FICO score 814 11/29/2016, Discover TU FICO 807 12/29/2016 Citibank Equifax Bankcard FICO score 827 12/27/2016 Average of Accounts 13 years and no Installment accounts, 1 TU inquiry in 2015
Message 3 of 4
Valued Contributor

Re: Closed accounts vs.. Open accounts - Which to pay down first?

Closed cards shouldn't "chase" the balance, that's what happens when a lender wants to close the card but thinks you might be more likely to pay if you keep it open.  I would consider closing any balance chasing card, it doesn't eliminate the need to pay but should prevent them raising interest rates or cutting the CL further.  Since you need to pay at least the minimum on all cards because going delinquent will hurt your score, you can tell whether the reported limits are reduced by your payments.


I agree with tackling highest util cards first, then high interest cards.  But once you get below 30% on a closed card keep making minimum payments and work on the others to keep the benefit of the credit line.  Once you pay off a closed card the credit limit falls out of the util calculation.


Based on what I've seen here and elsewhere I would:

1. Meet all minimum payments on time.

2. Pay highest util cards to below 80% util.

3. Use the "snowball" approach on the highest interest card - put all additional money on that one until paid off (or to 30% if closed).

4. Repeat #3 until all open cards are paid, then start snowballing closed cards.


You want to wind up with less than 10% total utilization, and "less than half" your cards reporting a balance.

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Starting Score:11/16/2009 EQ 566 11/16/2009 TU 538
Interim Score: 12/27/2012 EQ 683 09/17/2012 EX (lender) 670 1/01/2013 TU 701
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