What Is an Open Account on a Credit Report?

Typical Open Accounts

Many people have half a dozen or more open accounts on their credit report, including a mortgage, car loan, personal loan, credit cards, gas company cards, retailer cards and so forth. Note that credit cards are always open accounts even if your balance is zero. (You can, of course, close an open credit card account by contacting the provider.)

Closed Accounts

Closed accounts can be either paid-off personal loans, car loans, mortgages and the like or they can be accounts closed due to delinquency or at the consumer's request. Only accounts closed due to delinquency have a negative effect on your credit. For reporting purposes, credit bureaus generally divide both open and closed accounts into five categories: real estate, installment, revolving, collection and other.

Delinquent Accounts

Delinquent accounts on your credit report are accounts in which payment is currently past due. It is possible to have accounts that are just slightly late and thus delinquent, but have not yet reached the status of derogatory.

Derogatory Accounts

Derogatory accounts on your credit report are accounts that are having a negative impact on your credit score. While the credit bureaus do not release their specific policies, it is usually assumed an account more than 60 days late can become a derogatory account, and any two or more accounts 30 days late can also have a negative effect on your credit score.

Effect of Open vs. Closed Accounts

This is somewhat of a gray area, as the credit bureaus do not release exact information about how they calculate credit scores. The general rule is that it does not hurt your credit score to have numerous open accounts with no balances due, and it can even be a positive in terms of credit history length. But keep in mind that you are paying annual fees in most cases, so you probably want to close any open accounts that you are not currently using and that you have not significantly used in the past. There may be no benefit in keeping them open.