How To Get Closed Accounts Removed From Your Credit Report?
Requesting for Closed Accounts to Be Deleted from Credit Report
Having closed accounts on your credit report is quite normal and very often seen with those who have been using credit for a long time. Nevertheless, closed accounts are capable of having a detrimental influence on your credit rating in some particular circumstances. Fortunately, there are things that one can do to ensure that such are taken down. And here’s what you should know.
Why to Request for Closed Account Deletion
Being in a closed account by itself is not necessarily negative for one’s credit. For those accounts, if the accounts were paid on time and closed properly, they can even improve your credit because they show a healthy payment history.
However, it must be noted that if a person has many closed accounts in comparison with the number of open accounts, this may be detrimental to the credit score. The scoring models analyze the credit mix and like to see current accounts being managed responsibly as they are paid off.
Moreover, if a closed account had a bad payment history or other information that was adverse, it would equally bring about adverse effects on your score even after the closure of such an account. Collecting negative closed accounts can give you a good score lift and having these removed will be of similar benefit.
How Closed Accounts Affect Your Credit Score
The good news is that closed accounts are not going to linger on credit reports indefinitely either.
Here is when most will be removed automatically:
If there are no delayed payments in the accounts then such accounts, whether open or closed, will disappear from the Equifax and TransUnion credit reports in 10 years. Well, for Experian the duration is 7 years after which they are considered to have fallen off.
- Accounts that are closed are not helpful for credit analysis anymore, when they are closed as a result of being charged off or going to collections, they will be removed from a credit report 7 years from the date they first became delinquent leading up to the account being closed.
It is possible to rely on such automatic deletion dates in line with the credit bureau standards. Nevertheless, you might not wish to wait for 7-10 years for score change if you have detrimental effects from shut accounts. Ideally, it should be done earlier, so that they are not there in the first place.
As mentioned above, closed accounts are those accounts that are no longer active with patrons or customers due to various reasons such as termination of service, lack of patronage, reaching of the customer’s credit limit, or some other legitimate grounds, and such account can no longer be transacted with, thus the name closed accounts. As mentioned above, closed accounts are those accounts that are no longer active with patrons or customers due to various reasons such as termination of service.
If you don't want to wait for closed accounts to automatically fall off according to these policies, here are proactive steps you can take to potentially get them removed faster:
Make Mistakes with Credit Reporting Agencies
The first technique of having unwanted closed accounts deleted is by challenging inaccuracies with the primary credit reporting agencies. Disputing with Equifax, Experian or Transunion means directly challenging your credit report with the credit bureaus either by writing, Calling, or even through the Internet.
Some reasons why you may want to dispute closed account information include:
Issues such as incorrect payment history where the payments made were delayed due to other people’s mistakes.
- Transactions where balances are stated as ‘overdue’, or ‘delinquent’ when they should be recorded as ‘closed’.
- When it comes to analytical procedures, there is a possibility of having the same debt appearing twice.
- Old accounts that were related to an ex-spouse or a passed-on family member
- The fraudulent accounts created unauthorized or without your approval
When disputing a particular information, it is important to write a detailed dispute letter pointing out what particular information is erroneous or why the particular closed account should not appear on the credit report. If there is any proof to counter the allegations made by the other party, they should make copies and present them to the other side. The credit bureau is under obligation to launch investigations within thirty days.
If any mistake or the creditor, who reported an account, cannot confirm the information, the bureau is required to delete the information from the credit report. This can result in a good score increase.
Negotiate Directly with Creditors
If you still find that credit bureaus are unable to delete the records even after investigating your disputes, then you may try negotiating with the creditor or the collections agency that has reported you to credit bureaus. Consider negotiating if:
- What you were told is that there are no errors yet you wish to get rid of the negative mark
- This disturbs the credit rating as verified and confirmed late pay statements are dampening your score significantly.
- It seems that your credit history has suffered, but since the closed account was first reported, the situation has changed for the better.
It involves drafting a goodwill letter in polite language addressing the creditor and requesting him not to report the negative item or have it deleted from the credit. State in detail why you consider reporting it is fairest under the current circumstances.
For instance, indicate other fresh records with no flaws regarding the payment part, or point out one delayed payment that still affects your credit score, three years down the line.
Try to pay the outstanding balance if it has not been offered by the consumer to have the creditor withdraw a negative closed account. In the cases where it has been approved, ensure that the agreement in writing is made and signed before you make the payment.
What You Need To Know About The Closed Account And How To Increase Credit Score
The waiting for all the closed accounts to drop off your report may seem so long a period of between 7 to 10 years.
Here are key things to focus on in the meantime to offset negative closed accounts:
Paying all current credit accounts on time is as important as anything else – Payment history is always the biggest determining factor. Paying your bills on time also helps to improve the scores that you need for a credit card.
Minimize credit balances – this is where one should avoid having high balances on their credit cards. They stated that reducing the credit utilization ratio by having total balances below 30% of the credit limits boosts credit scores.
Reduce credit application frequency - The rate at which one applies for credit and the creation of new accounts has the potential to reduce credit scores significantly due to hard inquiries. Apply minimally.
Check your credit – From Equifax, Experian, and TransUnion, ensure you check your credit report for any accounts you are unaware of or errors so that you can dispute them as soon as possible.
Re-establishing the accounts as good credit means that misuse of new and existing accounts also gives the old closed accounts almost no meaning in credit scoring. This positive factor has a very powerful effect which, together with the positive effect of good payment histories and low debts, could compensate for the negative effect of the presence of delinquent closed accounts in the long run.
The quickest means of having the unwanted closed accounts deleted are challenging the information with credit reporting firms and dealing with the credit grantors personally. But, the active management of other parts of credit is equally important and hence closed accounts affect you less when reporting. They also help to check reporting mistakes frequently so that you can correct them on time.
As long as one challenges mistakes in dispute and has proper credit manners that were closed, then the bad impacts of closed accounts will not pull down your credit for long.
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