How to Remove Closed Accounts from credit report
Prakrati June 11, 2024

How to Remove Closed Accounts From Credit Report

Ever paid off a loan but your report reflects otherwise? Such closed accounts on credit report can be consequential, and in some cases, even cost you significant credit points. So, how to remove closed accounts from credit report? Before we get to it, what are closed account on credit report? How do closed accounts affect your credit? Let's find out.

What Are Closed Accounts?

Simply put, financial accounts that have been deactivated or terminated by the account holder or the financial institution respectively are considered closed accounts. 

These can include:

  • Bank Accounts
  • Loan Accounts
  • Credit Card Accounts
  • Investment Accounts
  • Utility Accounts
  • Subscription Accounts

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What Are the Scenarios Leading to a Closed Account?

A closed account isn’t necessarily a bad thing. For instance, a closed account may be a result of a loan that you’ve paid off - it calls for a celebration if anything. However, it can lead to consequences in certain scenarios based on the reason for closure. Here are scenarios leading to a closed account for your better understanding: 

  • Voluntary closure by account holder
  • Paid off debt
  • Account inactivity
  • Default or delinquency
  • Fraudulent activity suspected
  • Credit card issuer closure
  • Bankruptcy

How Do These Accounts Affect Your Credit?

AspectEffect of Closed Accounts
Payment HistoryIf the closed account had a positive payment history, this remains on your credit report and continues to benefit your score for up to 10 years.
Credit UtilizationClosing an account can increase your credit utilization ratio if it reduces your total available credit, potentially lowering your score.
Length Of Credit HistoryThe closed accounts will still be included in the length of your credit history calculation, but its impact will decrease over time.
Credit MixClosing an account could negatively impact your score if it reduces the diversity of your credit mix.
New CreditClosing accounts typically do not directly impact this aspect, as it primarily concerns recent inquiries and new accounts.
Total Number Of AccountsHaving fewer accounts can lower your score slightly, as a higher number of accounts generally indicates a well-managed credit profile.
Derogatory MarksIf the account had Derogatory marks, they will remain on your report for up to 7 years and continue to affect your score.

Why Should You Look Into Closed Accounts in Your Report?

◾ May Be Affecting Your Score (Negatively)

Yes, in cases where an account, closed owing to outstanding balances or a history of late payments, still appears on your report, it can affect your score negatively.

◾ Your Creditworthiness May Be At Stake

Lenders usually consider closed accounts when assessing your ability to manage your accounts, so it may impact the approval of your future applications. 

◾ May Put Your Financial Responsibility in Question

Closed accounts with negative marks can reflect poorly on your financial responsibility and trustworthiness to potential lenders.

Now that you know all about closed accounts and their impact on your credit, let’s address the main concern - how to remove closed accounts from the credit report. Let’s go over various scenarios and ways to do so.

Tackling the Issue: How to Remove Closed Accounts From Credit Report

Before you decide on a way to remove closed accounts from your credit report, there are a few questions you need to ask yourself. The first and most important question is: Is the information regarding the closed account on your report accurate? Additionally, how do the closed accounts on your report affect your overall credit health? Once you have all these answers, you can accordingly proceed to remove closed accounts from credit report in one of the following ways:

1. Dispute Inaccurately Reported Accounts

If you have an inaccurate closed account on your report, dispute it immediately. How? The first step is to create an evidence-based dispute letter. Once you have the letter, send it to either one or all three of the credit bureaus along with supporting documents. The bureaus may either confirm the negative item or correct it. If you find the process overwhelming, there are apps like CoolCredit to help guide you through it. CoolCredit not only helps you with AI-generated dispute letters but also offers the option to seek credit expert assistance on the matter.

Here are scenarios in which raising disputes is the best way to deal with closed accounts on credit reports:

  • Your credit report erroneously states that a closed account was closed more recently than it actually was, negatively impacting your credit score.
  • A closed account appears on your credit report, but you never authorized its closure. It might be a case of identity theft or administrative error.

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2. Pursue a 'Goodwill' Deletion

If your closed accounts had an error or two because of justifiable experiences, a 'goodwill' letter can help you get in the good books of creditors, convincing them to remove it from your report.

Here's How it Works:

  • Write a polite, concise letter.
  • Accept responsibility, and explain yourself.
  • Request removal of the negative mark.
  • Include supporting documentation.
  • Follow up politely.
  • Await the creditor's response patiently

Here are scenarios in which a 'goodwill' deletion letter is the best way to deal with closed accounts on credit report:

  • You have an otherwise impeccable payment history with a creditor, but due to unforeseen circumstances, you missed a payment, leading to the closure of the account.
  • Following a bankruptcy discharge, some accounts might still appear as closed with negative remarks on your credit report, despite being included in the bankruptcy.

3. Let Time Take Its Course

If you think the closed accounts in your credit report are harmless or you are not able to get them removed using the previously discussed ways, let time do the deed. Moreover, the impact of negative closed accounts lessens over time, and eventually, they fall off from your report.

Here are scenarios in which being patient and letting time take its course is the best way to deal with closed accounts on credit report:

  • You have a closed account with negative remarks on your credit report, but it's nearing the end of its reporting period, and you've maintained good credit behavior since its closure.
  • You have multiple closed accounts on your credit report due to past financial difficulties, but you've since rebuilt your credit and are actively working to improve it further.

Keeping Tabs on Closed Accounts on Credit Report

Now that you know what closed accounts on your credit report are and how they affect your credit score, you should understand the importance of identifying and addressing such accounts promptly.

And how do you do that?

Credit monitoring. Yes, keep a constant eye on your credit report to spot any closed accounts that you may not want listed.

How Can CoolCredit Help?

Firstly, CoolCredit allows you to retrieve your reports from all three bureaus. Secondly, with its AI-assisted Credit Monitoring, it analyzes every aspect of your report, bringing any new activities or changes to your notice, allowing you to make informed decisions and take proactive steps to deal with them. And finally, it even helps you dispute inaccurate items associated with your closed accounts. 


A closed account on credit report can be a cause of concern unless you address them in the right way. Dispute inaccuracies associated with your closed accounts, request a 'goodwill' deletion or just let time take its course. Remember, staying in the know of such accounts on your report is paramount, so use a credit repair app like CoolCredit to monitor your credit regularly.

FAQs on Closed Accounts in Credit Report

Q: What Is the Process to Remove Closed Accounts From Credit Report?

A: First, check your credit report for any misinformation regarding closed accounts. If you identify an error, dispute it with the credit bureaus. However, if you want to remove an accurate account, you might need to negotiate directly with the creditor or wait until the account ages and is removed automatically from your report. 

Q: Are Closed Accounts Bad for Your Credit?

A: Not by default. In fact, if they were in good standing, they could still positively impact your credit history. Nevertheless, closed accounts that were delinquent or in collections could be bad for your credit to some extent. 

Q: How Long Do Closed Accounts Stay on a Credit Report?

A: Well, that depends. Closed accounts in good standing remain on your credit report for up to 10 years. On the other hand, closed accounts with negative information are reflected on your report for 7 years from the date of the first delinquency. 

Q: What Is a Closed Account Letter?

A: Simply put, a closed account letter is one you write to a creditor or a credit bureau to request them to initiate the process to remove a closed account from your credit report. The letter typically contains your personal details, closed account information, and an explanation of the grounds for requesting the removal of the account. 

Q: Can Closed Accounts Be Reopened on a Credit Report?

A: More often than not, once an account is closed, it cannot be reopened on your credit report. Nevertheless, if you reach an agreement with the creditor to reopen the account, it may reappear on your report with updated status and information.




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