Account Closed By Credit Grantor indicates that your credit issuer has closed your account with or without your permission. Both parties may be liable for this.
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Did “Account Closed By Credit Grantor” appear on your credit report? But you don’t know the reason?
Well, this post can help. Because in this post, I will provide an in-depth overview of Account Closed By Credit Grantor along with its solution, your next step, and many more related queries. So, stay with me till the end.
So, what does account closed by credit grantor mean?
Check Out What is credit grantor?
What Does It Mean By Account Closed By Credit Grantor?
Account Closed By Credit Grantor means your credit card issuer or credit issuer has closed your account without asking you. It is also known as “canceled by credit grantor” or “credit line closed by grantor” in case of service credit.
Your credit grantor has the power to close your account without taking your permission. So, a bank, credit union, or lender can close your account anytime and this is why it appeared on your credit report.
Meaning of Charged Off Account Closed By Credit Grantor
Charged off account closed by credit grantor indicates that your account still has an outstanding balance but your credit grantor has wrote off your account as a loss.
In case a payment is 120-160 day due then the credit grantor try to write off the account as a loss. So that the account holder does not incur more debt. This mostly happens when the due amount is low.
Is It Bad When A Creditor Closes Your Account?
Whether it’s bad that your creditor closes your account depends on the reason behind this closure.
A creditor closing your account does not always have to be bad. They can close your account for many reasons. Here are some of the reasons why a creditor might close your account
- The credit card issuer might be closing shop or liquidating.
- Your credit card might be inactive for many months.
- Your payment might be due for more than 6 months.
- Your credit card issuer no longer offers this product
You should only worry if you have payment due or the account is charged off. Otherwise, the term “cancelled by credit grantor” won’t affect you.
Does Account Closed By Credit Grantor Affect Credit Score?
Your credit score will only be affected only if your account closed by credit grantor with balance. Meaning if there is a payment due then it can affect your credit score. Otherwise, it does not affect your credit score.
In the past, account closed by credit grantor had a negative effect on your credit score. But according to Experian,
Account closed by credit grantor does not affect your credit score at all if the balance is paid.
However, it can appear on your credit report for as long as 10 years. But what happens when your account gets closed?
What Happens When A Creditor Closes Your Account?
When a creditor closes your account, it primarily means that they have decided to no longer allow you to use that particular credit account.
The consequences of a creditor closing your account may depend on the terms of your credit agreement and your credit history. Here are a few things that could happen if the closed account has balance due
Impact on Credit Score
As mentioned earlier, a creditor closing your account can negatively impact your credit score if you have a payment due. Because 35% of your credit report is based on payment history. As a result, it will downgrade your FICO score. It may also increase your credit utilization ratio.
Late Fees or Interest
In case, you had an outstanding balance on the closed account, you may still be responsible for making payments on that balance. The creditor may also charge late fees or interest on any outstanding balance.
Collection Calls or Legal Action
If you fail to make payments on the outstanding balance of the closed account, the creditor may pursue collection calls or even legal action to recover the debt. This will only happen if the closed account has a high balance due.
However, if your creditor has closed your account for other reasons then you don’t have to worry. Because the account closed will only appear on your credit report and it won’t affect your ability to take a future loan. So, Can you reopen an account that was closed by credit grantor?
If A Credit Card Company Closes Your Account Can It Be Reopened
Yes, if a credit card company closes your account it can be reopened. But not all accounts closed by credit grantors get reopened. You can only reopen an account closed by the credit grantor
- If your account was closed due to no activity.
- You have payment due and you are willing to pay the dues.
- It was closed by mistake. As credit grantor’s internal collection department uses outdated software to determine the debt.
However, in case your credit issuer is liquidating, no longer offers the product, or closes business then you can not reopen the account.
So, How do I get rid of canceled by credit grantor?
How Do I Ask My Creditor To Remove A Closed Account?
The first thing you know before trying to remove a closed account is, your creditor is not obligated by law to remove the closed account. So, they can ignore your request and the account closed will remain on your credit report.
However, in case your previous record with the lender is good or you are willing to pay any outstanding amount then they might remove it from your credit report. Follow the below steps to ask your credit grantor for removing a closed account
Write a Letter
You can write a goodwill letter to your creditor explaining your situation and request to remove the closed account from your credit report. Try to be as clear and concise as possible in your letter. You can also attach your previous payment history and any relevant document.
Moreover, try to send the letter via certified mail with a return receipt requested so you have proof that the creditor received your request.
File A Dispute
In case your creditor does not respond within 30 days then you can file a dispute with all the major credit bureaus such as
Before filing your claim you should
- Get a copy of your credit report from each of the three major credit bureaus.
- Collect any documentation you have that supports your claim. You can collect the proof that you paid off the account and there is no outstanding balance.
Pay off To settle
In case the account has an outstanding balance then pay the balance to remove the closed account. Try to convince your creditor that you are willing to pay off any balance with fees in return they have to remove the account from your report.
This is how you can remove a credit grantor closed account from your credit report. However, you can also decide to wait and do nothing. As “account closed by credit grantor” will be removed from your report as time passes.
Should I Pay Off Closed Accounts On Credit Report?
Yes, you should definitely pay off any balance on a closed account. Because paying off a closed credit card account can help regain your credit score.
Even if the due balance was not the reason behind the account closure, you should also pay. As any unpaid balance can affect your credit score in the future.