What Does Account Closed By Creditor Mean? Your credit card report includes lots of information about your credit card which includes the status of each account. On your credit report, it may include a comment that shows who closed the account and may say “account closed by creditor” if the credit card issuers close your account.
Creditor Closes Account Reasons?
Creditors, on the other hand, have various reasons for closing your account. For Instance, your card issuers may decide to close your credit card account if you begin defaulting on your payments when there’s no activity on the account for a long period, or if the creditor is no longer issuing such cards.
However, the exception is in the case of delinquency, your credit report will not indicate the reason behind the credit card closure, only that the creditor closed it.
Account Closed Will It Affects your Credit Score?
The remark that your account is closed by your creditor does not in any harm your credit score. In credit scoring calculation. However, when your credit card account is closed either by you or your creditor, it can hurt your credit score by raising your credit utilization.
For example, your credit score can be affected if you still have a balance on your credit accounts. Or if you have a high balance on all other credit cards, and this was the only card with a significant available credit you can minimize the effect on your credit score by paying off the balance on the closed credit card, even if it will take you some period of time.
Also, if the credit card issuers close your account based on late payment these delinquencies will affect your credit score. The late payments will remain on your credit card report for up to seven years. But it will not hurt your credit scoreless as you continue to keep good information on your credit report.
Moreover, any account closed in good standing will remain on your credit report for 10 years. Or at whatever time the credit bureaus have set for reporting positive information to your credit report.
Closed Account and the Credit Reporting Time Limit
Although the credit card account is closed, it will still reflect on your credit report. If you’re still making payments on the balance, the payment history and timeless of your payments will also be reported
However, it is important that you continue to make at least a minimum payment promptly each month. Even after the account might have been closed, In order to protect your credit score. Late payments will definitely harm your credit score if the account is still open.
Consequently, if you have an account reported as closed and it’s still open contact your credit card issuers. If the creditor says it’s the creditor that closed it when it was you, use the dispute process to have your credit report updated. Remember that it does not hurt your credit score in any way whether you or your creditor closed the account.