Can I Get Closed Accounts Off My Credit Report?

A credit report serves as a detailed record of an individual’s financial behavior, encompassing information about credit activity and current credit accounts. This report outlines various aspects such as loan payment history, credit account status, and balances. Lenders, financial institutions, and other entities rely on these reports to assess creditworthiness, determine interest rates, and make decisions regarding loans, insurance, housing, and even employment.

Understanding Closed Accounts on Your Credit Report

“Closed accounts” on a credit report refer to credit lines or loans that are no longer active, meaning no new charges can be made, and the balance is either paid off or being paid down. Accounts can be closed for various reasons, including the account holder paying off a loan or requesting closure, or the lender closing the account due to inactivity, a history of missed payments, or other policy reasons.

The length of time a closed account remains on a credit report varies based on its payment history. Accounts closed in good standing, with a history of on-time payments, can stay on a credit report for up to 10 years from the date of closure. Conversely, closed accounts with negative information, such as late payments, defaults, or collections, typically remain on a credit report for seven years from the date of the original delinquency.

The impact of closed accounts on a credit score is not always straightforward. Accounts closed in good standing can continue to benefit a credit score by contributing to the length of credit history. However, closed accounts with negative marks can continue to harm a credit score until they age off the report. Closing a credit account can also potentially affect your credit utilization ratio, which is a factor in credit scoring.

Removing Accurate Closed Accounts

Accurate, verifiable closed accounts, whether positive or negative, generally cannot be removed from a credit report before their legally mandated reporting period expires. Credit bureaus are obligated by the Fair Credit Reporting Act (FCRA) to report accurate information. This federal law promotes the accuracy, fairness, and privacy of information maintained by consumer reporting agencies.

Attempting to remove accurate, positively performing closed accounts is not advisable. These accounts contribute to the length of your credit history and demonstrate reliable payment behavior, which can positively influence credit scores. Even negative accurate information, such as late payments, will remain on the report for its designated period, generally seven years, as stipulated by the FCRA. The reporting periods are designed to allow consumers to recover from past credit mistakes over time.

Identifying and Preparing to Dispute Inaccurate Closed Accounts

An inaccurate closed account contains errors such as an incorrect balance, an inaccurate account status, or an account never opened by the consumer. Errors can also include identity theft or misreported payment history details. Identifying these inaccuracies is the first step toward potential correction.

Consumers are entitled to obtain a free copy of their credit report from each of the three major credit bureaus—Experian, Equifax, and TransUnion—once every 12 months through AnnualCreditReport.com. Reviewing these reports thoroughly is essential to identify any discrepancies in account numbers, dates, balances, or account statuses. It is important to check all three reports, as information may vary between bureaus.

Before initiating a dispute, gather specific information and supporting documentation to substantiate the claim of inaccuracy. This includes the exact account number in question, the date the account was opened or closed, and a clear description of the specific inaccuracy. Relevant supporting documents might include payment records, bank statements, canceled checks, correspondence with creditors, or, in cases of identity theft, police reports.

The Process for Disputing Inaccurate Information

Once an inaccuracy on a credit report has been identified and all supporting documentation gathered, the next step is to initiate a dispute with the credit bureau. Disputes can typically be submitted online, by mail, or over the phone. While online disputes might be the fastest, sending disputes by certified mail with a return receipt provides a valuable record of submission.

When submitting a dispute, clearly state the inaccuracy, provide the specific account details, and include copies of all supporting documents; never send original documents. If the inaccuracy appears on reports from multiple credit bureaus, a separate dispute should be filed with each relevant bureau, as they do not share information with each other. The Fair Credit Reporting Act requires credit bureaus to investigate disputes, typically within 30 days of receiving the dispute.

During this investigation period, the credit bureau will contact the information furnisher, such as the bank or lender, to verify the accuracy of the disputed item. The furnisher is then required to conduct its own reasonable investigation. Upon completion of the investigation, the credit bureau must notify the consumer of its findings within five business days. If the information is found to be inaccurate or cannot be verified, it must be corrected or removed from the credit report.

Should the dispute be denied and the inaccuracy remain, consumers have further recourse, such as adding a statement of dispute to their credit report or filing a complaint with the Consumer Financial Protection Bureau (CFPB). The CFPB can help mediate complaints and may prompt companies to respond.