Credit Card Accounts that Don't Show Closed on Credit Report
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Posted: Thu Jan 13, 2005 2:03 pm
Post subject: Credit Card Accounts that Don't Show Closed on Credit Report
W Hyde
Date: 6/22/2000 2:08 pm CDT
Background:
I am trying to do my homework BEFORE applying for a new credit card. I have read several articles saying to improve your credit score, close accounts that you are no longer using and to check what is presently being reported by the Credit Reporting Agencies (CRAs). When I got my credit report I noted that it contained some old credit accounts [both credit card and store cards] that are either 'closed' or inactive for several years. Some accounts on the report correctly show the accounts closed. Others do not.
For those that do not, I started contacting the Creditors to inquire about the closed accounts. Of the first two I tried, both had an auto answer system that asked for the account number. Both could not access the account [would think that means it's closed]. Both fortunately had a means to get around that [rotary phone] to get to a person.
Creditor number one was a store that was bought out by another chain [and apparently the chain sold the account to someone else]. The rep said that the account was 'closed' and that there was nothing they could do to get it changed at the CRA to show that it really is closed. She said I would have to file a dispute to my credit report with the CRA, the CRA would contact the store creditor and then and only then the account would be 'purged'. This seems backwards to me: they should be accurately reporting it to CRA. Their required method is requiring extra work by me and the CRAs to fix the Creditors problem on incorrectly reported information. I would think the CRAs would have the muscle to force creditors to fix their computer reporting to show accounts closed by creditors.
Creditor number two was a store that the account had not been used over a long period of time. When a store purchase was attempted about two years ago, was told the old account was closed and they would reissue a new card [with a different account number], which they did. Both
accounts are showing on the credit report. The rep said that the old account was closed because it was inactive for a period of time. She called this type of auto closure a 'stubbed account'. She like creditor number one said there was nothing they could do to report to the CRA that the account was closed.
Observations:
I have seen recommendations to handle one 'incorrect' item in your credit report at a time with the CRA. If I follow the recommended step-by-step credit repair, directing my
'disputes' to the CRA, I could anticipate it taking a year or more to clear out accounts that are 'closed' by disputing them one by one. I seem to recall there are differences between what I would call 'closed' and what the credit industry calls 'closed', but I can't find particulars.
Questions:
Is my logic being overtaken by legal? I would think the creditors should be reporting correct information to CRAs.
If not, are creditors required by federal/state law to report correctly that an account is closed/purged/whatever to the CRAs?
Does anyone have the law(s) citation?
Does anyone know of a proven procedure to contact creditors to force them to accurately report information to CRAs?
Am I correct in understanding that any account that is inactive for over seven years, the CRAs are not to supply information to others? On my report above the first account that was last reported 09/1992 it says "THE FOLLOWING ITEM IS SUPPRESSED PENDING CREDIT GRANTOR UPDATE:". Note 'ITEM' is singular. The next account below this one shows updated 03/1991, but no mention about suppression.
CardRatings.com is the most comprehensive source for comparing credit card offers. Please visit CardRatings.com to view the best rated credit cards!
archive
Posted: Thu Jan 13, 2005 2:03 pm
Post subject: Credit Card Accounts that Don't Show Closed on Credit Report
Board Monitor
Date: 6/23/2000 4:48 pm CDT
Dear W Hyde,
First of all, let me say that I (nor any other CFCCT member for that matter) am not an expert when it comes to credit reports. Having given this disclaimer, your situation sounds typical. The process of removing closed/inactive accounts is a tedious one and often consumers find themselves caught in the middle of a "tug of war" of sorts between creditors and the CRAs. It would definitely appear, at least on the surface, that the creditor(s) would be to blame for your situation, though you may never be able to prove this.
At any rate, it is best to follow the "proper channels" and dispute the items with the CRAs. Granted, this process can be lengthy and time consuming, but if you really want the items removed, it is the action plan that I would suggest.
While you are correct in your assertion that closing inactive accounts can help your credit rating (see our "Free Credit Report"
page for more info.), not all credit card issuers put much weight on inactive accounts...especially if there is only one or two that
haven't had activity in several years. To safeguard against any potential negative outcomes during your application process, you might want to write a brief explanation of your situation on your credit card application.
Hope this helps!
Regards,
Jackie Hughes
Board Monitor
CardRatings.org
CardRatings.com is the most comprehensive source for comparing credit card offers. Please visit CardRatings.com to view the best rated credit cards!
Posted: Thu Jan 13, 2005 2:03 pm
Post subject: Credit Card Accounts that Don't Show Closed on Credit Report
W Hyde
Date: 6/22/2000 2:08 pm CDT
Background:
I am trying to do my homework BEFORE applying for a new credit card. I have read several articles saying to improve your credit score, close accounts that you are no longer using and to check what is presently being reported by the Credit Reporting Agencies (CRAs). When I got my credit report I noted that it contained some old credit accounts [both credit card and store cards] that are either 'closed' or inactive for several years. Some accounts on the report correctly show the accounts closed. Others do not.
For those that do not, I started contacting the Creditors to inquire about the closed accounts. Of the first two I tried, both had an auto answer system that asked for the account number. Both could not access the account [would think that means it's closed]. Both fortunately had a means to get around that [rotary phone] to get to a person.
Creditor number one was a store that was bought out by another chain [and apparently the chain sold the account to someone else]. The rep said that the account was 'closed' and that there was nothing they could do to get it changed at the CRA to show that it really is closed. She said I would have to file a dispute to my credit report with the CRA, the CRA would contact the store creditor and then and only then the account would be 'purged'. This seems backwards to me: they should be accurately reporting it to CRA. Their required method is requiring extra work by me and the CRAs to fix the Creditors problem on incorrectly reported information. I would think the CRAs would have the muscle to force creditors to fix their computer reporting to show accounts closed by creditors.
Creditor number two was a store that the account had not been used over a long period of time. When a store purchase was attempted about two years ago, was told the old account was closed and they would reissue a new card [with a different account number], which they did. Both
accounts are showing on the credit report. The rep said that the old account was closed because it was inactive for a period of time. She called this type of auto closure a 'stubbed account'. She like creditor number one said there was nothing they could do to report to the CRA that the account was closed.
Observations:
I have seen recommendations to handle one 'incorrect' item in your credit report at a time with the CRA. If I follow the recommended step-by-step credit repair, directing my
'disputes' to the CRA, I could anticipate it taking a year or more to clear out accounts that are 'closed' by disputing them one by one. I seem to recall there are differences between what I would call 'closed' and what the credit industry calls 'closed', but I can't find particulars.
Questions:
Is my logic being overtaken by legal? I would think the creditors should be reporting correct information to CRAs.
If not, are creditors required by federal/state law to report correctly that an account is closed/purged/whatever to the CRAs?
Does anyone have the law(s) citation?
Does anyone know of a proven procedure to contact creditors to force them to accurately report information to CRAs?
Am I correct in understanding that any account that is inactive for over seven years, the CRAs are not to supply information to others? On my report above the first account that was last reported 09/1992 it says "THE FOLLOWING ITEM IS SUPPRESSED PENDING CREDIT GRANTOR UPDATE:". Note 'ITEM' is singular. The next account below this one shows updated 03/1991, but no mention about suppression.
CardRatings.com is the most comprehensive source for comparing credit card offers. Please visit CardRatings.com to view the best rated credit cards!
archive
Posted: Thu Jan 13, 2005 2:03 pm
Post subject: Credit Card Accounts that Don't Show Closed on Credit Report
Board Monitor
Date: 6/23/2000 4:48 pm CDT
Dear W Hyde,
First of all, let me say that I (nor any other CFCCT member for that matter) am not an expert when it comes to credit reports. Having given this disclaimer, your situation sounds typical. The process of removing closed/inactive accounts is a tedious one and often consumers find themselves caught in the middle of a "tug of war" of sorts between creditors and the CRAs. It would definitely appear, at least on the surface, that the creditor(s) would be to blame for your situation, though you may never be able to prove this.
At any rate, it is best to follow the "proper channels" and dispute the items with the CRAs. Granted, this process can be lengthy and time consuming, but if you really want the items removed, it is the action plan that I would suggest.
While you are correct in your assertion that closing inactive accounts can help your credit rating (see our "Free Credit Report"
page for more info.), not all credit card issuers put much weight on inactive accounts...especially if there is only one or two that
haven't had activity in several years. To safeguard against any potential negative outcomes during your application process, you might want to write a brief explanation of your situation on your credit card application.
Hope this helps!
Regards,
Jackie Hughes
Board Monitor
CardRatings.org
CardRatings.com is the most comprehensive source for comparing credit card offers. Please visit CardRatings.com to view the best rated credit cards!
posted by CardRatings.com at 1:55 PM
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