Closed accounts on credit report

[folks19]

When a credit account is closed, does the bank or creditor have any influence on whether, and for how long, the account remains on report? I'm asking about both accounts closed in good standing and in bad standing.

If someone closes a credit card in good standing, can the bank stop reporting every month and the account will just fall off, or does the account remain on the report for 10 years regardless?

And if the account was closed in bad standing with missed payments, can the bank stop reporting the account after just 2 years, for example, and have the negative information disappear, or does that account stay for 7 years regardless?

I'm very confused about this because I see everywhere that accounts in good standing stay on the report for up to 10 years,  but whu isn't it 10 years whenever the account is closed on good standing?

[FireMedic1]

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@folks19 wrote:

When a credit account is closed, does the bank or creditor have any influence on whether, and for how long, the account remains on report? I'm asking about both accounts closed in good standing and in bad standing.

The creditors run the clock, not the creditor. Good standing it can stay on reports up to 10 yrs. Some cases less or more.

Bad standing depends on what kind of closure it was. Charge off is 7 yrs from the DoFD. If they closed it for any other reason. Same applies as above.10yrs +/-

If someone closes a credit card in good standing, can the bank stop reporting every month and the account will just fall off No, or does the account remain on the report for 10 years regardless? Same applies above in good standing.

And if the account was closed in bad standing with missed payments, can the bank stop reporting the account after just 2 years, for example, and have the negative information disappear, or does that account stay for 7 years regardless? Stays for 7 yrs from the date of the late. But then turns positive until fall off as explained above in good standing.

I'm very confused about this because I see everywhere that accounts in good standing stay on the report for up to 10 years,  but why isn't it 10 years whenever the account is closed on good standing.

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10 years is the norm for all accounts. Good or bad. The last reported date is where it starts the fall off clock. But some have fallen off before then. Some for whatever reason pass ten yrs if its updated by the creditor during the 10 year period. And it starts over again. If any negative account stays it becomes positive because negatives fall off in 7 yrs. So theres a 3 yr period that it is in good standing up to the 10 yr fall off date. But YMMV. What is the bad account.

[folks19]

@FireMedic1 Why do some accounts stay on the report for a little more or less than 10 years? How is it determined when exactly the accont will fall off?

I also heard of people who lost all their credit hostory because they only had an AU and they were removed or the account was closed. Do AUs also stay for 10 years?

[folks19]

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@FireMedic1 wrote:

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@folks19 wrote:

When a credit account is closed, does the bank or creditor have any influence on whether, and for how long, the account remains on report? I'm asking about both accounts closed in good standing and in bad standing.

The creditors run the clock, not the creditor. Good standing it can stay on reports up to 10 yrs. Some cases less or more.

Bad standing depends on what kind of closure it was. Charge off is 7 yrs from the DoFD. If they closed it for any other reason. Same applies as above.10yrs +/-

If someone closes a credit card in good standing, can the bank stop reporting every month and the account will just fall off No, or does the account remain on the report for 10 years regardless? Same applies above in good standing.

And if the account was closed in bad standing with missed payments, can the bank stop reporting the account after just 2 years, for example, and have the negative information disappear, or does that account stay for 7 years regardless? Stays for 7 yrs from the date of the late. But then turns positive until fall off as explained above in good standing.

I'm very confused about this because I see everywhere that accounts in good standing stay on the report for up to 10 years,  but why isn't it 10 years whenever the account is closed on good standing.

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10 years is the norm for all accounts. Good or bad. The last reported date is where it starts the fall off clock. But some have fallen off before then. Some for whatever reason pass ten yrs if its updated by the creditor during the 10 year period. And it starts over again. If any negative account stays it becomes positive because negatives fall off in 7 yrs. So theres a 3 yr period that it is in good standing up to the 10 yr fall off date. But YMMV. What is the bad account.

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I also found a post from @Anonymous at this link suggesting that AU accounts staying on the report varies by the lender. Why won't that be the case for for non AU accounts?

[SouthJamaica]

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@folks19 wrote:

When a credit account is closed, does the bank or creditor have any influence on whether, and for how long, the account remains on report? I'm asking about both accounts closed in good standing and in bad standing.

If someone closes a credit card in good standing, can the bank stop reporting every month and the account will just fall off, or does the account remain on the report for 10 years regardless?

And if the account was closed in bad standing with missed payments, can the bank stop reporting the account after just 2 years, for example, and have the negative information disappear, or does that account stay for 7 years regardless?

I'm very confused about this because I see everywhere that accounts in good standing stay on the report for up to 10 years,  but whu isn't it 10 years whenever the account is closed on good standing?

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I'm not an expert, but it's my impression that once the closed account is in the credit report, unless the lender sends in a change, it's up to the bureau how long to keep it there. 10 years  is a number that is often mentioned, but there's no guarantee that a closed account will stay there that long, and sometimes they stay longer.  I once had 5 closed accounts dropped by Equifax within a year of closing.

[Remedios]

Removal of positive accounts is left up to CRAs unless creditor instructs them to remove a TL. 

10 years is "average". Some can stay longer, some are removed earlier than 10 years.

Since it's not legally mandated like removal of negatives, there isn't a rule, more like whenever CRAs decide to do some house cleaning. 

As far as negative accounts, it depends on the final status.

If lates are present but it was brought to current (never charged off), lates are removed no later than 7.5 years from DOFD but the TL itself can/will hang around after negatives are gone, essentially becoming a positive account. 

Additionally, three CRAs remove negatives differently. They can either remove entire string of lates at once, or lates in a string drop off in monthly increments.

I think EX removes string (if there is one) and the other two go one by one. 

If lates are isolated, they drop off based on DOFD. 

Charged off accounts are removed in their entirety no later than 7.5 years from the DOFD. 

[calyx]

The reason why we say "up to 10 years" is because of the average.   As Remedios says - it's not mandated, but if we keep saying "10 years"  someone is going to get upset about a good account dropping off at 9y post-closing (nevermind 1 or 2, which has also happened), when technically, there's no reason it can't.

Sometimes, positive accounts come off early for CRA houskeeping reasons.   Sometimes they hang around for a VERY long time - I have an account that has been closed for nearly 15 years just hanging out on my EQ report.  Why?  I don't know.  I suspect it's a glitch, but I'm happy it's hanging out there making my EQ score look good.

The 7y (or 7y+180 for collections) fall off for negatives is something that is set in stone by law.   As is the different reporting for Federal student loans.  But for positive accounts, it's just very much a YMMV situation (and AUs seem to always get a little weird).

[Junejer]

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@Remedios wrote:

Removal of positive accounts is left up to CRAs unless creditor instructs them to remove a TL. 

10 years is "average". Some can stay longer, some are removed earlier than 10 years.

Since it's not legally mandated like removal of negatives, there isn't a rule, more like whenever CRAs decide to do some house cleaning. 

As far as negative accounts, it depends on the final status.

If lates are present but it was brought to current (never charged off), lates are removed no later than 7.5 years from DOFD but the TL itself can/will hang around after negatives are gone, essentially becoming a positive account. 

Additionally, three CRAs remove negatives differently. They can either remove entire string of lates at once, or lates in a string drop off in monthly increments.

I think EX removes string (if there is one) and the other two go one by one. 

If lates are isolated, they drop off based on DOFD. 

Charged off accounts are removed in their entirety no later than 7.5 years from the DOFD. 

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This is kind of what happened to me. EX just deleted them all at once and early. EQ started removing the string one by one until there were two left then deleted both. TU removed them one by one and painfully slowly (six months after EX removed and two months after EQ did). Just depends on what the CRAs decide they want to do and when (within the legal guidelines).

[FireMedic1]

Thanks all for clarfying. Been working OT cause of Covid. Little crazy right now.

[folks19]

Thanks @Anonymous @Remedios @calyx for your insite on the topic.

I was always under the impression that a positive account would stay close to 10 years. I am still somewhat new to credit (2.5 years) and I don't have any closed accounts yet, but I will keep this in mind before closing an account. I got used to believing that even if I close an account, it will still continue aging for 10 years and it will have no affect on my AAoA for years, but now I know that is not the case.

btw, does it make a diference if it's an AU account? I have heard about people who were AUs and lost all their creidt history because they were removed or the account was closed. It didn't seem like anyone mentioned the account staying on their report for 10 years.