Your credit report contains a wealth of information about your credit accounts. With certain accounts, your creditors may add a comment regarding the status of the account. Reading over your credit report, you might notice some closed accounts have a comment that states "account closed at grantor's request" or "closed by grantor."
What Is a Credit Grantor?
The credit grantor is another term used to describe your credit card issuer or the company that has granted some form of credit to you.
As your credit grantor, the credit card issuer can make a lot of decisions about your account as outlined in your credit card agreement. They can raise or lower your credit limit and your interest rate. They can charge fees to your account for certain transactions, and they can charge fees as a penalty if you're late with a payment. However, your credit grantor can also close your credit card account, sometimes without warning.
Why "Closed By Grantor" Might Appear on Your Credit Report
Most major credit card issuers report consumer account information to at least one of the three major credit bureaus, including details about the open or closed status of your account. "Closed by grantor" can appear on your credit report when your credit card issuer closed your credit card as opposed to when you have closed your own account.
Your credit card issuer may close your account for variety of reasons including:
- You fell behind on credit card payments,
- The credit card was inactive for an extended period of time,
- The credit card was replaced with a newer version,
- The creditor detected fraud on the account,
- You reported the card lost or stolen,
- The store partnered with the credit card has permanently closed,
- The economic landscape has changed,
- The credit card issuer is liquidating.
Credit bureaus are required to include only accurate information on your credit report. If, for example, your credit report reads that a credit card issuer closed your account, but in fact, you were the one who requested the account to be closed, you can dispute the credit report entry. Include a copy of your credit card close request and the return receipt from the certified mailing proving the creditor received your request.
Otherwise, if the comment is accurate, it will stay on your credit report for the duration of the credit reporting time limit. If the account was closed with negative information, e.g., it was charged-off, then it will fall off your credit report after seven years.
Accounts closed in good standing will remain on your credit report based on the credit bureau's internal guidelines for reporting positive closed accounts, which is typically ten years after the account is no longer active.
Will the Comment Affect Your Credit Score?
You may be worried about how a comment indicating your credit grantor closed the account will affect your credit score. After all, having a good credit score is critical to having your credit card and other applications approved.
Fortunately, any comment stating that your credit card issuer closed your account or the fact that your creditor closed your credit card (rather than you closing it) won't hurt your credit score. Comments aren't factored into your credit score. Only activity on your accounts is factored into your credit score.
Often, prospective creditors check credit scores rather than reviewing your credit report because it's a faster way to approve applications. A comment that your account was closed by the credit grantor may go unnoticed. Even so, it typically won't count against you, especially if the rest of your credit report contains positive information.
Your credit score could be affected by a closed credit card if you still have the balance on the credit card or if your other credit cards have balances. An account closure could also affect your score if the card was your only credit card. If the account was closed because of late payments, the late payments would also affect your credit score.
If you feel your account was closed in error, you can contact your credit card issuer to ask about re-opening it. Otherwise, paying off any outstanding balance quickly is the best way to protect your credit score.