How Do I Get Closed Accounts Off My Credit Report?
This way is also good for your credit score, as closed accounts need to be deleted from the credit report. In most cases, when you close a credit card or any loan that is offered to you, it will remain on your credit report for up to 10 years. This enables the lenders to access your credit history when it is most crucial when you are applying for a new line of credit. But, closed accounts in the report especially when you are seeking to rebuild your score affect it in a bad way. However, it is nevertheless comforting to know that closed accounts can be unlinked. Here is a briefing on how to achieve the task as follows.
Learn About the Effects of Closed Accounts on Your Credit Score
When an account is closed, if you have fewer sources of credit, your available credit and the credit utilization ratio decrease. These are two important resources that lenders use to arrive at your score. Your credit line is a measure of your total revolving credit whereas your utilization ratio depicts how much of the total available credit you are using. The cap for this percentage should not exceed 30%, according to experts. If you owe $2,000 on your credit cards and have a $10,000 credit limit across the cards, then your utilization rate is 20%. However, if you have a card with a $5,000 limit, the utilization jumps to 40 percent if you close that card. This makes you appear more risky in the eyes of the lenders.
The fifth tip that the article offers is to Increase Your Credit Limit Before Closing Accounts.
The way of addressing such change is to ask for an increase in the credit line on the open accounts. This helps increase your overall revolving credit backup so as not to have a high percentage of your credit utilization. The general rule of thumb for asking for a credit limit increase is every 6 months, and you can call your credit card issuers and request for a higher credit limit. Even if you raise the existing credit limits, you will also be reported a higher total limit when your closed credit accounts are no longer around.
If the closures seem unjustified, creditors may be requested to agree that the closures occurred earlier than the actual date.
As soon as you receive the statements, you should contact the creditors and explain to them that you want your accounts to be closed from the month you opened the account and they should honor this request. This way, after 10 years, when the account is no longer in your report, it looks like it was never there from the start with the actual opening date. The bureau may not honor the request, however, it is still a question worthy of being put forward.
Disputes over facts claimed to be in the filed documents
The federal Fair Credit Reporting Act gives consumers the right to dispute any inaccuracies in their accounts, which the three major credit bureaus must investigate within 30 days. This consists of the accounts that you may be charged with and disagreed with or the accounts that may have the wrong balances, dates opened, payment status, or others. Record your disagreements in writing and always file the letters to the relevant authorities as copies of the letter should be sent by certified mail. If an agency cannot verify information placed on its website within one month, it should immediately take it down. Sometimes, due to the existing gaps, some of the newly closed accounts may reopen, but you can continue disputing them.
Send letters to creditors to request them to delete the authorized user accounts.
That is an account that is associated with another person, via which the primary account holder has control of the credit card or loan. This puts the authorized user in a position to borrow money from an existing line of credit. It also enables them to establish credit based on the primary user who is making regular payments. However, upon removal of your name as an authorized user, that tradeline is deleted from your credit files. If you have been holding a card mainly for credit building, then it will be helpful to request to be removed from the account to delete a closed account.
Negotiate for Goodwill Removals
Even though a credit grantor attested to the fact that the information provided was accurate, one can request the credit grantor to remove the accounts stated as goodwill adjustments, where the credit grantor agrees to remove the accounts because of hardship or any other genuine reason that led to the closure. Offer to include their brand in future credit products as repayment guarantees to assist in rectifying credit reports. Then get this allowance in writing before the account disappears and you find yourself with an empty wallet.
Wait it Out
Lastly, patience has always paid off and so the consumer should wait until such negative items or closed accounts disappear. Closed accounts, with few exceptions, are deleted from the file after 10 years as stipulated by the Fair Credit Reporting Act. The only case when it does not disappear is in case you have filed Chapter 7 or Chapter 13 of the bankruptcy law. It is important to set calendar reminders to ensure that you check your report as the account nears expiry. Look at your score as it recovers gradually from the removal of the unstable accounts.
As mentioned earlier, getting closed accounts removed from your credit report often involves some form of dispute, personal communication, and waiting. However, when necessary, following through with removals will enable you to advance toward credit repair goals. Therefore, make an action plan, stay aggressive with the creditors and bureaus, and check the changes after a certain interval of time. The other accounts that were opened but closed as they were unwanted can be removed from the list hence not bringing down your score.
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