The Meaning of "Account Closed at Grantor's Request"
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 has granted 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
Now that you understand who your credit grantor is let's explore why "closed by grantor" might appear on your credit report.
Your credit card issuer likely has an agreement with the credit bureaus to provide information about your account, which includes 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.
Your credit card may have been closed for a variety of reasons including:
- You fell behind on credit card payments,
- The credit card was inactive for a 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.
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, your credit score is one of the most important numbers of your life. Having a good credit score is critical to having your credit card and loan 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 the account will affect your credit score.
A creditor with whom you've applied for credit won't know that an account was closed by a creditor unless they manually review your credit report. Often, creditors check credit scores because it's a faster way to approve applications. Even if a creditor reviews your credit report, they likely won't hold it against you that your account was closed by the credit grantor, especially if the rest of your credit report contains positive information. Today, so many people open and close credit cards, it's no longer considered negative if a grantor closes your card as long as it was closed under good terms.
However, 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.