How to Get a Closed Account off Your Credit Report

A woman cuts up a credit card
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Many people close credit accounts they no longer want, thinking that the account will automatically be removed from their credit report. Unfortunately, that's not the case. The law allows credit bureaus to include all accurate and timely information on your credit report. Information can only be removed from your credit report if it's inaccurate, outdated, or the creditor agrees to remove it.

What Happens When You Close an Account?

When you close an account, it's no longer available for new transactions. You're still required to pay off any balance you still have due.

After the account is closed, the account status on your credit report gets updated to show that the account has been closed. When you close an account with a balance, the creditor still updates your account details with the credit bureaus each month. Your credit report will show the most recently reported balance, your last payment, and your monthly payment history.

Removing Closed Accounts From Your Credit Report

In some cases, a closed account can be bad for your credit score. This is especially true if the account was closed with a delinquency, like a late payment or charge-off. Payment history is 35% of your credit score and any late payments can cause your credit score to drop, even if the payments were late after the account was closed. If you could remove the negative account from your credit report, your credit score could potentially improve.

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Removing a closed account from your credit report isn't always easy, and you can only remove them from your credit report in certain situations.

If the account on your credit report is actually open but incorrectly reported as closed, you can use the credit report dispute process to have it listed as an open account.

Having a credit account reported as closed (when it's actually open) could be hurting your credit score, especially if the credit card has a balance. You can dispute any other inaccurate information regarding the closed account, like payments that were reported as late that were actually paid on time.

You can use a goodwill letter to request a creditor remove a closed, paid account from your credit report.

Creditors don't have to give in to a goodwill request, no matter how nicely you ask, but you may get lucky and find a creditor who's sympathetic to your request.

For accounts with balances, the "pay for delete" strategy can help you remove a closed account from your credit report. The pay-for-delete letter offers full payment of the outstanding in exchange for removing the account from your credit report.

Again, creditors don't have to comply. Occasionally some creditors and debt collectors agree to the arrangement with payment as incentive to remove the account from your credit report.

You can send your goodwill or pay for delete letter directly to the creditor by mail. In some cases, you can try contacting the creditor by phone first to make your request.

Wait for Accounts to Drop Off

If you choose not to take steps to remove closed accounts, you'll be happy to hear that these closed accounts won't stay on your credit report forever. Depending on the age and status of the account, it may be close to dropping off your credit report for good. If that's the case, all you have to do is wait a few months for your credit report to update.

Most negative information can only be listed on your credit report for seven years.

If the closed account includes negative information that's older than seven years, you can use the credit report dispute process to remove the account from your credit report.

No law exists that requires credit bureaus to remove a closed account that's accurately reported, verifiable and doesn't contain any old, negative information.

Instead, the account will likely remain on your credit report for ten years or whatever time period the credit bureau has set for reporting closed accounts. Don't worry, these types of accounts typically don't hurt your credit score as long as they have a zero balance.