I have an account with my bank that appears as active on my credit report, but my bank confirmed that this account was closed three years ago. How do I go about getting my credit report updated so that it's accurate?
- CAC
Dear CAC,
When you close an account, your lender sends a notification to Experian so that the account status can be updated to reflect "closed" on your credit report. The account will show that it is closed, but it will not be removed from the credit report right away.
The status change is usually reflected in one to two billing cycles. If it's been more than a couple of months with no update, you can file a dispute with the credit bureaus.
How to Fix Errors on Your Credit Report
You have several options for updating incorrect information on your credit report:
- Submit a dispute online via the Experian Dispute Center to let us know the account should show as closed. Experian will contact your lender and ask them to verify and update the account accordingly.
- If you have documentation showing that the account was closed, such as a letter from your lender, you can submit that document to Experian online.
- Ask your lender to contact Experian directly to update the account as closed.
You may also wish to order copies of your credit report from the other two credit reporting companies, Equifax and TransUnion, so that you can ensure the account is being reflected as closed with them as well.
Will My Credit Score Change Once My Account Is Updated?
Whenever there is a major change to your credit history, such as paying off a loan or opening or closing an account, your credit score may be impacted. Although the act of closing an account is not considered negative, there are some instances where you may notice a dip in scores once an account has been updated to show closed:
- Credit card accounts: When you close a credit card account, it often affects your credit utilization rate. Your utilization rate shows the percentage of total available credit you are using on your revolving accounts and is an important scoring factor in most score models. When you close a revolving account, you lose the credit limit associated with that account, which can cause your utilization rate to increase if you still have balances on other accounts. This can, in turn, hurt your scores.
- Installment accounts: While it's always good to pay off debt you owe, paying off an installment account, such as a home or car loan, may result in an initial dip in credit scores. Although the account will still be part of your credit history, accounts closed and in good standing aren't factored into credit scores as heavily as positive accounts that are still open and active. The good news is that any decline is usually temporary, and scores should bounce back up within a month or two.
How Long Do Closed Accounts Remain on My Report?
A closed account remains on your credit report for seven or 10 years, depending on the account's payment history. Late payments stay on your credit report for seven years. If the account was delinquent when it was closed, it will be automatically removed from your credit report seven years from the original delinquency date. The original delinquency date is the date the account first became late without being brought current.
If the account was past due but brought current prior to when it was closed, only the late payments will be removed once the seven years are up. The account will then appear on the report as a positive account.
If the account is positive, meaning it shows that it was never late, it may stay on your credit report for up to 10 years from the date it was closed. Therefore, a positive account may remain on your credit report longer than an account with negative information. This allows you to get credit for your on-time payments longer.
Thanks for asking.
Jennifer White, Consumer Education Specialist