How to Get Closed Accounts Off My Credit Report
Understand how closed accounts affect your credit report and learn the proper ways to manage their impact on your financial history.
A closed account on a credit report signifies a credit line or loan is no longer active for new transactions, though its historical data remains. Many consumers mistakenly believe that once an account is closed, it automatically vanishes from their credit report. This is not the case, as the history of such accounts continues to be part of one’s credit profile.
Types of Closed Accounts and Reporting Durations
Closed accounts fall into two primary categories based on their payment history. Accounts closed in good standing, meaning they were paid as agreed without significant negative marks, typically remain on credit reports for up to 10 years from the date of closure or last activity. These accounts are beneficial, demonstrating responsible payment behavior and contributing to a longer credit history.
Conversely, negative closed accounts have adverse marks, such as late payments, collections, or charge-offs. Most negative items remain on credit reports for seven years. This seven-year period begins from the date of the first delinquency that led to the negative status, rather than the date the account was closed or charged off. For instance, if a payment was missed in January 2020 and the account subsequently went to collections, the seven-year clock starts in January 2020.
Specific exceptions to this rule include Chapter 7 bankruptcies, which remain for 10 years from filing, and Chapter 13 bankruptcies, reported for seven years. Tax liens are no longer included on credit reports by major credit bureaus, a change implemented by April 2018.
Disputing Inaccurate or Unverified Accounts
Removing closed accounts from a credit report primarily involves disputing information that is inaccurate, incomplete, or cannot be verified. The first step involves identifying potential inaccuracies on your credit report. This could include incorrect balances, wrong account numbers, accounts that do not belong to you, accounts mistakenly listed as open when they are closed, or accounts showing outstanding debt despite being paid. Cases of identity theft also warrant a dispute.
After identifying errors, gathering supporting documentation is crucial. This evidence might include bank statements, payment confirmations, canceled checks, correspondence with creditors, or police reports if identity theft is involved. Having clear documentation strengthens your dispute.
Consumers are entitled to a free copy of their credit report every 12 months from Experian, Equifax, and TransUnion via AnnualCreditReport.com. It is advisable to obtain reports from all three bureaus, as information may vary.
Once prepared, draft a dispute letter to the credit bureaus. This letter should clearly identify your personal information, the specific account number, and the exact error you are disputing. Explain why the information is inaccurate and request removal or correction. Sending the letter via certified mail with a return receipt requested provides proof of delivery.
The dispute process can be initiated online through the credit bureaus’ portals or by mail. After receiving your dispute, the credit bureau typically has 30 days to investigate the claim. During this period, the bureau will contact the data furnisher to verify the accuracy of the disputed information. If the information cannot be verified, it must be removed or corrected.
In parallel with disputing through the credit bureaus, you can also contact the original creditor or the company that furnished the information directly. This dual approach can sometimes expedite the resolution process. If the dispute is successful, the account will be removed or updated accordingly, which can positively impact your credit profile. If the dispute is denied, the credit bureau must provide a written explanation, and you may have the option to add a brief statement to your credit report explaining your side of the dispute.
When Accounts Remain on Your Report
Accurate and legitimate closed accounts, even with past negative marks, cannot be removed from a credit report before their statutory reporting period expires. The Fair Credit Reporting Act (FCRA) governs how long information remains on a credit report. Credit bureaus and creditors are legally obligated to report accurate information. Attempting to remove accurate negative information prematurely is not possible and can be unproductive.
Once the reporting period for a negative item, typically seven years from the date of the first delinquency, has passed, the account will automatically fall off the credit report. For bankruptcies, the period is seven or ten years depending on the type. No action is required from the consumer for this automatic removal.
Positive closed accounts, such as paid-off loans or credit cards closed in good standing, can remain on a credit report for up to 10 years. These accounts are beneficial as they contribute to a longer credit history and demonstrate responsible financial behavior.