How To Get Rid Of Closed Accounts On Credit Report?

Introduction

This is quite normal especially if you have been in credit for many years and the accounts have been closed. But active closed accounts on your report can affect your score in the wrong way in some other cases if they are maintained for a long time. However, there are ways through which you can stop the accounts that have been closed from reflecting on the credits. This guide will demystify closed accounts, whether or not they are required to be removed, and how closed accounts can be removed from a credit report.

What Are Closed Accounts?

Inactive accounts are credit accounts that include credit cards, loans, lines of credit, and any other accounts with credit facilities that have been closed. An account may be closed for various reasons:

You transfer the balance – You decide to transfer the balance of one card or any other credit facility that you have to another one. This is known as ‘voluntary closure’.

The lender closes the account - This is because once you fail to make your payments, you default to pay the loan, or you transgress the set standard procedures and policies, the lender can close your account. This is known as an ‘involuntary closure’.

The account naturally closes – Mortgages and student loan kinds of accounts close once the borrower has repaid the balance in full.

My question is whether closed accounts should be reported on the credit report or not.

Usually, accounts that are listed as closed are not bad, especially if the accounts were closed at your request and with a positive history. That you have both opened accounts and positively closed ones is evidence that you have a credit history and that you manage credit responsibly, which will be good for your credit score.

However, if the accounts were closed with a negative balance, or closed due to being charged off or delinquent, they will affect your credit utilization ratio as well as your credit score. Delinquent accounts, accounts that have been written off, or accounts that are in collections never expire and are reported on your credit report for seven years from when they first become delinquent. Multiple closed account with negative status tells the lenders about future risks.

Erasure of certain specific closed accounts can be beneficial in terms of improving your credit report and constant misuse of your present credit score. Generally, aim to remove closed accounts that fall under the following categories:

Closed with a negative rating and/or an involuntary closure or left with a negative mark: Paid while in consumer credit counseling. This category included accounts that had greatly reduced your credit score. Customers who fail to pay bills end up being reported to collections agencies These are accounts whose credit details can be several years old, and which may not represent the credit behavior of the credit holder anymore.

Several users have asked me how they can get closed accounts off their credit reports, so I have decided to write this brief tutorial to explain how this process can be done.

If you have determined that deleting certain closed accounts would benefit your credit report, here are four methods you can use:

• Dispute the Account Directly - If you are in this situation and have closed accounts that show up in your report as active or have other indications that are wrong, you can contact the three major credit bureaus and challenge them directly. To do this, you will need to: Obtain your credit report from Equifax, Experian, and TransUnion Look for mistakes and accounts you would like to delete as inactive To begin the dispute process, write the bureau where you found the error using the appropriate format and send it to each bureau through a certified mail If the bureau notifies you that errors were verified, but they have not made corrections, call them back. Credit bureaus normally provide a time of 30 days to conduct their investigations on any information that has been disputed including the closed accounts. If it is disputed as inaccurate or out of date, the bureaus must delete the accounts from your credit report.
• It is also important to hire a Credit Repair Company - You can also use the services of a professional credit repair agency to manage the process of disputing and deleting the closed accounts on your behalf. Credit repair companies also know how to deal with the process and the credit bureaus themselves. While they work on a monthly subscription basis, they can also help you avoid having to attempt to delete undesirable closed accounts of your own volition.
• Negotiate Directly with Creditors - If the account was closed by the lender or credit card company, as may be the case when you have made several late payments, failed to pay your debt on time or your account was sent to collections you may be able to persuade the creditor to reopen your account. Reach out to them, tell them how the closed account on the report harms you, and discuss ways on how they can revoke it. When approaching creditors of the closed account, explain the reasons for deleting the account if you have strong ones, prove that you are managing the current credit well, and offer to pay part of the debts, some may kindly allow the account to be withdrawn and request for its removal from the credit bureaus.
• Wait Out Negative Items - Naturally, negative closed accounts will drop off after some time, so wait for that to happen without rushing the process. Non-payment records such as those from accounts that have gone delinquent or have been turned over to a collection agency can only remain on your credit file for a maximum of seven years.

You cannot compel the stripping off of such accounts just because the history painted by the closure reports is unfavorable to whoever is involved. However, it is also possible to just wait for the seven years to pass without fulfilling any of the conditions of the agreement. It should then no longer appear in your most recent credit report the closed accounts should.

Cash Under Management, Credit with Closed Accounts Removed

Having unwelcome closed accounts deleted from your credit report can aid in improving your credit standing by:

• You are improving your credit score – Paying off items that have negative remarks or balances will help in the improvement of your score.
• Reducing the credit limit - This method also brings down the credit utilization ratio since you are eliminating credit cards with higher balances.
• Disputing entries - Removing old accounts that have gone into collections or have been charged off reduces your credit history.
• Increasing the likelihood of approval – You become a good candidate for debt should you have fewer negative records.
• Protecting open accounts – Maintaining only open accounts that are in good standing, strengthens the credit mix.

Conclusion

Maintaining closed accounts on credit history reports requires implementing the strategy of using credit lines that have been held for a long time responsibly while at the same time freeing up unwanted credit accounts that hurt the current credit score. It is good to exclude those who have involuntarily shut down or are in delinquency but retain those who portray a good history. Challenging the credit report directly, employing credit repair help, negotiating with the creditors, and waiting when the account is out of the time limit will all assist in eradicating undesirable closed accounts. This helps to update your credit report and enhance new credit addition.

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