Why is my account reported as closed?

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Why is my account reported as closed?

By JENNA LEE

When it comes to credit report information, accuracy is of the utmost importance. Your credit score measures your creditworthiness and plays a huge role in your financial journey, so you wouldn't want to be judged unfairly for a late payment that you didn't make or an account that you didn't close.

Unfortunately, the credit bureaus don't always have the correct information. In fact, errors are probably more common than you'd expect--a 2013 FTC study found that one in four consumers identified errors that could affect their credit scores. Inaccurate information has the potential to negatively impact your credit health, so it's important to ensure your account details are correct. Here's the scoop on what to do if an account is being incorrectly reported as closed.

Why your account is reported as closed

Your account may be reported as closed for a variety of reasons:

  • You requested it. If you wrote to your creditor, canceled your account and got acknowledgement that the account was closed, it should come as no surprise that it shows up as "closed" on your credit reports. Closed accounts in good standing will typically remain on your report for 10 years, while negative payment history for these accounts may remain on your report for seven years.
  • You paid off or refinanced a loan. Paying off a loan usually closes the account. Since you've finished paying off your debt, you've fulfilled your obligation and the loan no longer needs to remain active. On the other hand, refinancing involves paying off your current loan with a new one, so you might see your old loan is closed (and a new one is added).
  • Your creditor closed it due to inactivity. It costs money for lenders to report to the bureaus, so if you don't use your card for a long time, you become a drag to your issuer and they may close your account. To prevent this from happening, you could try keeping one small, monthly, recurring payment on accounts you want to keep active.
  • Your creditor canceled your account because of delinquencies. If you fall behind on your payments, your lender may choose to revoke your charging privileges and cancel your account. Do whatever you can to stay on top of your payments to avoid this unfortunate situation.
  • The credit bureau made a mistake. If this is the case and you have proof that the account should be listed as open, simply file a dispute to fix the error. We'll cover how to do so in the next section.

What to do if you didn't request to close the account

If you don't know why your account is being reported as closed, contact your lender first to see if they can give you any insight. You'll save yourself a lengthy dispute process if they can confirm that they intentionally closed your account. If you'd like to reopen your account, talking with your creditor may be enough to convince them to do so for you. Even if they won't, you'll at least know that it wasn't a credit bureau error that caused the closure.

If, instead, your lender agrees that your account is still open, you'll need to file a dispute. This generally involves marking the error(s) on your credit report, finding proof that your account isn't closed, writing a letter and mailing everything to the appropriate bureau or bureaus. While it may not be fun, the time and effort you put into fighting incorrect information may be well worth the trouble if it results in a more accurate credit score.

Bottom line

Your credit score should accurately represent you. Closed accounts may negatively affect your credit health, so just as you would fight to defend your reputation, it's important to ensure that the information that is used to judge your creditworthiness is just as spick and span.

About the author: is Credit Karma's Social Media Manager. Although her specialty lies in creating witty post-it notes, she also enjoys sharing all the financial information she's learned since joining Credit Karma in February 2012. When she's not working, you can probably find her trying out a new dessert recipe or learning/perfecting any musical instrument she can get her hands on. Say "hi" @leejennaa!

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All Comments

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1 Contribution
35 People Helped

Helpful to 35 out of 35 people

I only have one mortgage adn I went to the Credit union when I saw this last year. I contacted you also . You you have me owing more that I do. Also Kohls says I owe over 300.00. I do not owe them anything and have not in months. This is so unfailr for us to have to checkwith three credit bureaus and none of them are the same. I also feel they treat older peopl differently than younger ones. These credit reports are not accurate most of the time and it takes an act of congress to fix them. They hold our dignity in their hands. The credit bureau can destroy someone. 

1 Contribution
34 People Helped

Helpful to 34 out of 38 people

Even though we made our payments ontime and never missed a payment, our card was closed by the creditor because the randomly check credit scores. They thought ours was lower than they wanted it to be, and so the closed it. What i think happened, was that we paid off our furniture early and so we were spared of all that back interest. I think the company didnt like that, so they closed us down. When they closed us down, it hurt our credit score even more. This was wrong on their part.

3 Contributions
25 People Helped

Helpful to 24 out of 25 people

There's another reason.  Best buy recently changed banks or  something, so they just did that, closed all the accounts (so now they appear as closed in our reports) and opened new ones transferring the balance (no now that also appear in our reports as us opening ccounts) the status say something like 'Closed for a transfer'

Top Contributor

Reply by
CKCharmaine

512 Contributions
1094 People Helped
Helpful to 24 out of 28 people

You're right! That also happened recently when GE became Synchrony.

Reply by
mocuz

3 Contributions
11 People Helped
Helpful to 11 out of 11 people

And it should say closed for transfer. Not just closed....

1 Contribution
3 People Helped

Helpful to 3 out of 3 people

i paid off my truck loan and it dropped my score 15 points. i dont understand.

1 Contribution
11 People Helped

Helpful to 11 out of 13 people

Another reason.....I hope! Recently my Discover account was compromised....I disputed the charge in question and called Discover customer sevice to dispute the charge. I finally ended up with their fraud department. The disputed charge was credited back to my account BUT....I was told they they were closing the current account (which I opened in 1985) and would change the account number and issue a new card. I have received my new account number & card and all seems to be well now. However the new account does not appear on my credit report and I took a healthy hit on my credit score due to a closed account! All of this was relatively recently so hopefully the new account will re-appear on my report soon. BTW....I suggest everyone check their accounts daily (or at least weekly) in order to catch any unauthorized charges.....I usually do it daily.

Credit Karma Team
Top Contributor
2949 Contributions
4777 People Helped
Helpful to 12 out of 12 people

Hi buck2010, 

Your new Discover account should be backdated to reflect the original opening date of 1985. However, this could take a billing cycle or two to be reflected on your credit report. I'd contact Discover directly to be sure they will merge the new account with your existing history. 

1 Contribution
3 People Helped

Helpful to 3 out of 3 people

Paid both of my student loans off.  No history of missing a payment.  Now the loans are showing with comment "closed".  The notes above say, "Paying off a loan usually closes an account."  So, does this closed status have a negative impact on my overall score?  

1 Contribution
5 People Helped

Helpful to 5 out of 5 people

This is not me. I did not have any accounts closed. In fact I am a month ahead on my credit cards, ahead on my handicap van insurance, and my home mortgage has only been with 21st. mortgage. The one prior was paid off from my home insurance in 2005-6 for a home I lost to Hurricane Katrina. My wallet was stolen while an inpatient at The University of Southern Alabama Medical center by an employee there. I made out a in hospital complaint about the way Security put my valuables in my bed side drawer while I was still under anesthesia. An employee who cam and drew blood at 2:00 A. M. in the morning (which my Dr. told me he did not order blood drawn but I woke and the philibotimist had my checkbook under her arm. I caught her with it and she gave it back. But my wallet with all credit cards and I. D. was gone. There is also a Mobile Ala. Police report on this one back in 2010. Then on 2012 (because I have no legs and am in a power chair) my wallet is always in my right front pocket. Setting on it all the time causes sores. I lost it in the Walmart parking lot in Waveland MS. in 2012. Someone used my Credit One card in Dallas Tx. Someone else tried to buy a Chevrolet car in Georgie. This is rathere suspicious since I am a leg amputee who drives a 23 Y/0 "paid for" Chevy Van G-20 and is all I have owned since I lost my leg in a motor home crash off  a Missouri Ozark mountain after the trailer brakes failed and it plunged 708 ft. to the bottom. I have had but one leg since then on Feb 26, 2006. Other than that, I have no idea who is using my credit. I keep all my bills paid as I am permantly on SSDI and will now be for the rest of my life. I am dying with congestive heart failure, so I certainly am not in a position to purchase except what I pay for on my existing credit cards. I have no control over what a thief does with my credit when they have all of my I. D..   

Reply by
Gryphaeon

7 Contributions
14 People Helped
Helpful to 7 out of 7 people

Identity theft is extremely difficult and troublesome to deal with, I have dealt with it myself and I don't envy you the mess that is ahead to clean up, but it is possible to do. Any incorrect information on your credit report can adversely effect your score so it would be a good idea to contact the reporting agency and dispute it. Also, contact the Furnisher of Information and let them know that they are reporting incorrect information. If this doesn't clear it up, you may need to take it a few steps further but then you will have grounds to file suit for willfull non complaince of the FCRA.  You will need to create a paper trail and be sure that you have given them enough time to resolve the situation after you notify them of the problems.  I have done this myself personally and created a system of sample letters and instructions on how to use them and the laws that govern it all.  If you are interested, run a search online for Weathering Debt and you will be able to find it.  You can also find the information for free at many sites, even the FTC has an opinion about doing it yourself vs paying someone else to do it for you.  Check it out, the worst thing that could happen is you will learn something :)

Reply by
Gryphaeon

7 Contributions
14 People Helped
Helpful to 1 out of 1 people

Identity theft is extremely difficult and troublesome to deal with, I have dealt with it myself and I don't envy you the mess that is ahead to clean up, but it is possible to do. Any incorrect information on your credit report can adversely effect your score so it would be a good idea to contact the reporting agency and dispute it. Also, contact the Furnisher of Information and let them know that they are reporting incorrect information. If this doesn't clear it up, you may need to take it a few steps further but then you will have grounds to file suit for willfull non complaince of the FCRA.  You will need to create a paper trail and be sure that you have given them enough time to resolve the situation after you notify them of the problems.  I have done this myself personally and created a system of sample letters and instructions on how to use them and the laws that govern it all.  If you are interested, run a search online for Weathering Debt and you will be able to find it.  You can also find the information for free at many sites, even the FTC has an opinion about doing it yourself vs paying someone else to do it for you.  Check it out, the worst thing that could happen is you will learn something :)

Reply by
Gryphaeon

7 Contributions
14 People Helped
Helpful to 2 out of 2 people

Identity theft is extremely difficult and troublesome to deal with, I have dealt with it myself and I don't envy you the mess that is ahead to clean up, but it is possible to do. Any incorrect information on your credit report can adversely effect your score so it would be a good idea to contact the reporting agency and dispute it. Also, contact the Furnisher of Information and let them know that they are reporting incorrect information. If this doesn't clear it up, you may need to take it a few steps further but then you will have grounds to file suit for willfull non complaince of the FCRA.  You will need to create a paper trail and be sure that you have given them enough time to resolve the situation after you notify them of the problems.  I have done this myself personally and created a system of sample letters and instructions on how to use them and the laws that govern it all.  If you are interested, run a search online for Weathering Debt and you will be able to find it.  You can also find the information for free at many sites, even the FTC has an opinion about doing it yourself vs paying someone else to do it for you.  Check it out, the worst thing that could happen is you will learn something :)

1 Contribution
5 People Helped

Helpful to 5 out of 5 people

Report shows card/account closed... BUT I never had a card with them

Top Contributor

Reply by
CKCharmaine

512 Contributions
1094 People Helped
Helpful to 7 out of 10 people

You can try disputing this error on your credit report: https://www.creditkarma.com/article/dispute-credit-report-errors

3 Contributions
6 People Helped

Helpful to 4 out of 4 people

Also is there a way to get the closed account off and it say paid in full? Or will that change anything. So frustrated with this mess.

1 Contribution
4 People Helped

Helpful to 4 out of 4 people

My card was closed due to being a second card holder on my husbands Amex account.  Since my husband closed his account it automatically closed mine. Should this affect my credit score. 

Credit Karma Team
Top Contributor
2949 Contributions
4777 People Helped
Helpful to 4 out of 6 people

Hi Sammie Os,

That depends on whether this was a joint account or you were an authorized user of the card, among other things. 

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