Correcting a credit report
September 17, 2018 7:57 AM   Subscribe

I recently closed a credit account.

I mishandled my finances and had difficulties making a credit card payment. In an attempt to pay it off, and start cleaning up my credit, I requested an option to a monthly agreement, which required me to close the account. This action now shows up on my credit report as "closed"; but closed by who? I believe that if closed by ME, there should not be consider a negative? But if by the creditor as a negative. How can I determine this? And correct it if it is harming my report? I will add that I am trying to pay off all my accounts, and looking for ways to improve my rating.
posted by ebesan to Work & Money (4 answers total) 4 users marked this as a favorite
 
It's a negative if it's closed by you, because it represents a reduction in your available credit. But it's not derogatory in the sense of being closed by the creditor (which is like "closed with extreme prejudice.") Some other user might be able to give a sense of the impact in terms of credit score points on the different scores.
posted by chesty_a_arthur at 8:13 AM on September 17, 2018


chesty_a_arthur is correct. It can lower your credit score because it lowers available credit. In addition, depending on how long the account was open, it may lower you average credit history, which also lowers your score.

Take heart though. You are working on getting things squared away and it's definitely better to take a hit for closing an account than to take a bigger hit for missing payments or defaulting. Good luck!
posted by The Deej at 8:17 AM on September 17, 2018


Weirdly, it doesn't seem that it makes a difference why the account was closed for your score. I suppose they've captured all the relevant information in the late payments and, if necessary, the referral to collections, all of which do affect your score. Now, it's possible that a human being inspecting your report (like a landlord) may be negatively influenced by this, but hopefully in that context you will have the chance to explain.

Good luck! I once had a card closed on me by the issuer. Now my credit rating floats around 800, and the only reason it's not higher is that I don't have any installment loans.
posted by praemunire at 8:23 AM on September 17, 2018


As it looks like you are attacking credit issues proactively, I'll recommend Credit Boards as a great resource. There is an almost overwhelming amount of good information and advice there, and a very active user community. There are also templates for letters you may need to send to creditors.

When my credit was trashed post-divorce over 10 years ago, I couldn't get a loan or credit card of any kind. Credit Boards was the most useful resource for getting on track and rebuilding my credit.
posted by The Deej at 8:29 AM on September 17, 2018 [2 favorites]


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