People stop using their credit cards because they believe that closing the account will erase all of its information from their report. However, this is not true as reports are governed by The Fair Credit Report Act which includes precise and timely info on your credit report. If an individual has inaccurate or outdated data then it can be removed but only if you ask for it to be deleted and the creditor agrees to do so too!
Several people close a bank card when they no longer want one due to thinking that doing so removes them from being able see these accounts in any future reporting. This may seem like what would happen; however, banks follow laws such as ‘The Fair Credit Reporting Acts”.
Do you close your credit card account or other accounts when they are no longer in use to remove them from the report? While it is true that closing an account prevents its usage, by doing so, this does not mean it disappears immediately from a person’s credit history. Credit reports involve information for both open and closed accounts; as long as these stay on the report- even if unused – can continue affecting their score.
In order to truly get rid of any negative impact caused by a closed account then one should contact either CRB or creditor for removal (preferably with accurate info) before removing themselves altogether which will make sure all previous inaccuracies have been corrected while still ensuring enough time has passed without being used/borrowed again.
The Fair Credit Reporting Act needs credit reporting agencies to correct or delete inaccurate info. And even then, it does not occur automatically. You must first successfully dispute the info in question to have it updated or removed.
All 3 credit bureaus – Equifax, Experian, TransUnion let customers initiate disputes online or by certified mail. When initiating a dispute, you will need to offer specific info to the credit bureau, including:
- Your name
- Account number
- Nature of the information you’re disputing
- Supporting documentation to show why the dispute is valid
From there, the credit bureau must investigate your claim with the creditor or lender in question, typically within 30 days, and notify you in writing of its findings.
If the disputed info is inaccurate, by law it has to be corrected and removed. Once an error is removed from your credit report, the credit bureau cannot add it back in until the lender or creditor proves that it was precise. That procedure can take care of negative info related to errors, but it is unable to remove a closed account from the credit report. And if you are seeking removal based solely on negative activity, that is probably to be a dead-end if the info is accurate. There are other ways you can use to remove the closed accounts.
You can try to ask the furnisher for their goodwill by requesting they remove your negative item. While this is not always successful, it’s worth a shot if you have an otherwise clean credit history and believe that this behavior will never happen again in the future.
Wait for Accounts to Drop Off
If you select not to take steps to remove closed accounts, you will be happy to hear that these closed accounts will not stay on your credit report forever. Depending on the account’s age and status, it may be nearing the credit-reporting time limit for when it’ll drop off your credit report for better. If that is the case, all you may have to do is wait some months for the account to fall off your credit report, and then for your credit report to update.
The Credit Dispute Process
If the account is, actually, closed then it needs to show up as being closed on the credit reports. And, because it has not been updated to show as being closed, the person will have to go via the credit report dispute process to have it updated across all of the credit reporting agencies.
If the credit card issuer still had a record of the account readily available in their systems, then the person won’t have to go to all 3 of credit bureaus (Experian, Equifax, TransUnion) directly because he/she can file her dispute directly with her credit card issuer, which then has to correct all of the credit reports.
However, it seems like the issuer does not have any account record any longer. This means he/she will have to go to each of the credit bureaus (assuming it is showing up incorrectly at all 3) and file disputes directly with them.