How Long Is an Account Closed to Further Purchases With a Balance on a Credit Report?

A credit account, such as a credit card or home equity line of credit, is only available for purchases as long as the account remains open. You have the option to close a line of credit at any time. Doing so, however, does not absolve you of your responsibility to pay off the remaining balance you owe. Credit providers also sometimes close consumer accounts, but, typically, only do so when the debtor misses payments or otherwise disregards his original agreement with the creditor. Closing an account does not eliminate it from your credit records.

Time Frame

The federal government regulates how long a closed account can remain on your credit report. If you closed the account voluntarily, and the account was in good standing, it will appear on your credit report for seven years beginning on the date you closed it. If the creditor closed your account due to nonpayment, the Fair Credit Reporting Act stipulates that the reporting cannot begin until 180 days after your most recent payment. Because of this, the account can remain on your credit report for 7.5 years. The balance you carry has no impact on how long a given entry can remain on your credit report.

Credit Impact

Payments you make to your creditors have a more significant impact on your credit scores than any other factor. Missing payments prior to an account closure leaves your credit damaged. Your credit suffers further when the creditor charges off the debt and closes the account.

Yet another factor that influences your credit after closing an account is the remaining balance you owe. The amount of credit available to you versus the debt you owe is known as your "credit utilization ratio." When you close an account, the spending limit you previously enjoyed vanishes -- causing a higher credit utilization ratio and lower credit scores.

Connected Information

If you leave the account unpaid, your creditor can either sell it to a collection agency or sue you for payment. Collection agencies report collection accounts to the credit bureaus. Collection accounts indicate a history of poor payment and negatively influence your credit. The FCRA notes that, like the original creditor's report, a collection account remains on your credit report for 7.5 years.

Consumers often believe that the reporting period for a collection account begins when the debt collector first reports the debt to the credit bureaus. This simply is not the case. Like the original creditor's report, the federal reporting period for collection accounts begins 180 days from the date you stopped paying the debt's original creditor.

Judgment Records

A judgment record on your credit report notes that a previous creditor successfully sued you in the past. Unlike missed payments and charge-offs, the credit bureau deletes judgments based on how long the judgment remains valid. Once the judgment expires, it will vanish from your credit file. For example, in California, a creditor has ten years to enforce a judgment -- resulting in the judgment appearing on a California debtor's credit record for ten years. An exception to this rule exists for states that maintain a short enforcement period. If judgments in your state remain valid for less than seven years, the credit bureaus use the standard seven year reporting period used for missed payments and charge-offs.