Whether or not an account is "closed" is totally separate from the type of credit granted on the account.
Credit cards are revolving lines of credit that permit the consumer to purchase, and thus obtain credit, up to a specified limit, with payments revolving around the current balance.
The CRAs permit closing of revolving accounts that still have a debt balance as a means for creditors to prevent the consumer from increasing the debt by making new purchases. Closing does not affect the continued obligation to pay, the reporting of delinquencies, or the current status of paid or of a deliquency and remaining balance.
Loans are installment credit, contracted for specific amount of $ to be repaid in fixed installments with fixed dates.
Since the consumer cannot unilaterally increase the principal debt by making new purchases, there is no need or provision to close an installment loan that remains unpaid/delinquent. As intructed in the CRA credit reporting manual, creditors should not report a date closed for an installment account until the debt is discharged.
I would suspect, in view of the inconsistency in reporting a credit card as a paid loan, that such a statement in a commercial credit report is not an inaccuracy in the consumer's credit file, but rather a crappy and erroneous report from the vendor.
I would contact the CRA and request clarification before disputing, as it may not be an actual issue of erroneous information in the consumer's file, but rather a poorly constructed credit report.
