Is it better to close an account after you've paid it off or keep it open?

Answer 1

it will be better for your credit number to leave it open and use it occasionally so it will be reported as a revolving account in good standing!
:-)

Answer 2

That depends on how many accounts you have open, how long you had the account, and if this an account with an annual fee.

Its usually good to have 3-5 open accounts in good standing, and so if you have less then that number, keep it.

If there is an annual fee, and you dont think you will use it, why keep it open?

Also, the longer you have an account open the better it is for your credit, so if this is one you have had for a while, consider closing one of the newer accounts.

in short, if this is an account you opened last month, has an annual fee, youre not going to use it in the future and you already have 5 other accounts, close it. Anything else would depend on the specific situation.

Answer 3

Keep it open especially if it is an older account. Keeping it open with no balance increases you credit to debt ratio on your FICO score thus with no balance your credit looks better. If you do use it again keep the balance below 30% and pay it off prior to the due date this will also help your score

Answer 4

If you are not going to use it again, CLOSE IT.

When the credit people look at a potential loan or credit application in the future, they will consider this account.

Of course that depends on the account you mentioned. Is it a revolving account like Sears, credit card, etc.? Revolving accounts have a tendency to be considered debt because you will show how much line of credit you still have and with the account being open it may work against you.

Answer 5

I would leave it open since a full 35% of your score is based on payment history.

Just use it every now and then and pay it off in full before the due date and it will work for you as far as building credit is concerned.