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, 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 as a penalty for certain actions on your part. And, your credit grantor can close your credit card account, sometimes without even warning you first.
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 show up on your credit report.
Your credit card issuer likely has an agreement with the credit bureaus to provide information about your account - that includes details about the open/close status of your account. "Closed by grantor" can show up on your credit report when your credit card issuer closed your credit card. That may have happened for a variety of reasons: 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, or you reported the card lost or stolen.
Credit bureaus are required to include only accurate information on your credit report. If it's not true that your credit card issuer closed your account and you were the one who requested that your account to be closed, you can dispute the credit report entry. Include a copy of your credit card close request and certified mailing or return receipt that proves the creditor got 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 may be around 10 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, the comment that your credit card issuer closed the 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.
However, your credit score could be affected by a closed credit card if you still have the balance on the credit card or your other credit cards or if it was your only credit card. If the account was closed because of late payments, the late payments (not the "account closed" comment) will affect your credit score.