Most of the time, open credit card accounts look better on your credit report than closed accounts, so it’s good to know how to reopen a closed credit card account.
Open accounts extend the average age of your credit history. It’s good for your credit score when you have older accounts.
More importantly, keeping your credit card account open can boost your credit score by lowering your credit utilization ratio (assuming you keep the account balance paid down).
If you made the common mistake of closing a credit card like I did and you want to reopen the accounts, you could ask the credit card company to reopen the account.
However, the credit card issuer may open a new account instead of reopening your old account.
So be sure to ask beforehand whether your account will show up as a “new account” on your credit report or if the old account’s status will change to “open.”
Best case scenario: the credit card issuer agrees to send you a new card with the same account number as the card you closed.
To a lot of consumers, common sense says otherwise, but credit cards marked as “open” on your credit report will usually help your credit score more than a closed account.
Many people think a closed or paid off account, looks better in their credit history.
Here are several reasons why you’ll want to keep open credit card account or two on your credit report:
Together, the three factors above comprise 80 percent of your FICO credit score, and keeping a credit card account open can help with all three!
And open accounts could even help with the remaining 20 percent of your score, at least indirectly:
When I first started getting my credit life under control, I thought that closing and paying off my Capital One credit card would help my credit.
I was wrong. Closing the account caused my score to drop even further.
Since I already had bad credit, it was a huge challenge trying to get Capital One to reopen the account. I’m sure the same would be true with any other major credit card including a Chase, Discover, American Express, or Citi card.
So here’s what I did:
First, I applied for and received a secured credit card to rebuild my credit (Open Sky Secured Credit Card is the card I got in case you’re wondering).
I kept up the payments for one year. At the end of the year, I called Capital One’s customer service number and asked if they would “kindly consider reopening my account based on the recent steps I have taken to improve my credit score and the accounts I have in good standing as of right now.”
They checked my credit report. A few weeks later I received a new Capital One credit card with the same account number as my old card.
The card number was the same, but the credit limit was only $500. You have to start somewhere, so I started using the $500 credit line.
As a cardholder, I made on-time payments for two more years. Then I called customer support again and asked for a credit line increase, which they granted.
Reopening this account helped jump start my journey to better credit. It wasn’t easy, but it was worth the time.
You get the point: Patience and a willingness to take small steps will get you there. Just stick with it!
If you’ve closed a credit card account and you regret it — but your credit score won’t let you get a new card — here’s where to start:
Using one or more of these strategies could improve your credit score enough so that your old credit card issuer would consider reopening your old account.
Once your old account gets reopened and listed as such on your credit report, you should start seeing even more improvement in your credit score.
Keeping your old credit card account open after paying it off should help your credit — and your monthly budget — but only if you don’t use up the available credit.
Too many consumers get a balance transfer card to consolidate credit card debt which can be a really good decision.
Then, they run back up the balances on their old credit cards. This just restarts the cycle and adds to your monthly debt.
Sooner or later you’ll get behind and have late payments and other derogatory marks on your credit.
So keep your accounts open to maximize your credit, but don’t use these accounts. For best results, never let your credit card accounts get higher than 30 percent of their available credit limits.
Old accounts, new accounts — it’s all guesswork if you don’t know your credit score. I recommend checking your score at least once a month.
You can see your official credit reports from Equifax, Experian, and TransUnion by visiting annualcreditreport.com, a site operated by the Federal Trade Commission.
You can also get a free credit score using apps like Credit Sesame and Credit Karma. You’ll need to confirm your Social Security number and answer some questions about your identity to sign up for these services.
If you’re like me, you’ll want to know your credit score before making personal finance changes. That way you can track the results of things like keeping your old credit card accounts open.
When you get an account reopened — or make any other changes — check your credit report to make sure the changes get recorded correctly.
The credit bureaus have a legal obligation to report data correctly. If they don’t, you’ll need to send a dispute letter.
If you need help removing inaccuracies such as derogatory marks from your credit reports, check out my article: How to Get Something Removed from Your Credit Report.
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Chase sucks! I have had a card since 1989 and they just closed it, because I hadn't used it in a while. So I used it last month and paid it off - they closed it anyway. I have excellent credit and they would NOT re-activate the card. 29 years of use and loyalty and they would no nothing!
Wow why is that? Are you sure? That doesn’t seem to make much sense... at all..
Is there a time limit for which you can ask a creditor to reopen an account?
I opened an account in 2003, kept up with payments and closed (Thought I was doing the right thing at the time) it in 2006.
Should I even bother asking if they'd consider reopening the account or has too much time passed?
I was going to ask the same question. I had 2 capital one cards opened in 2007. I closed one of them in 2012. I wonder if they would reopen my account.
What if a credit card is currently in collections and sends an offer to reopen your account.
They are offering to reopen the account for the amount owed and change the debt from charge off to settled. There will be no available balance on the new card when it is issued and will put me at 100% usage.
Should I try to work an offer with them to remove the negative after one year of being in good standing?
Any advice is appreciated. I went through a rough patch in 2014 and am just getting back on track. I am planning to purchase a house next year, so I am trying to clean everything up as much as possible.
It sounds like a ploy by the collection agency to get you to pay the account. The collection company wouldn't have the authority to "reopen" an account for you. Try reaching out to the original lender and resolve directly with them. If you pay the collector, the account will stay closed and show as "settled" on your credit report.
I'm currently trying to improve my credit. Closed a Chase credit November 2008. All in good standings and paid in full. This will remain on my record until November 2018? Why would I not try to reopen, right? Any call I have done they cut me off. Even before I can ask? Guess I'm calling the wrong people.
The ball is on their court.If they want to honor you a chance to reopen the account, just accept it. Remember the oldest is the account will better help you with your scores.However, if they want to open a new account as a courtesy because you paid your closed acct. just accept it as well.You are lucky.:-) either way it will boost your credit. Ask them if you pay them an extra $100-$200 Dollars if they can consider to delete all derogatory marks from the closed account.
See you at the top!
Great advice, thanks for sharing.
just wanted to add that an open credit card adds improves your debt to credit ratio. :)
Yes, very good point!