Apr
05
2006

A dispute results in an account being “updated” and “closed”

Dear Experian,

I disputed an account on my credit report. It came back “updated,” and on the status shows “closed.” Then it states, “account closed by grantor’s request.” Does this mean it is closed and I don’t have to pay that account, or does it mean something else?

- BXK

 

Dear BXK,

The statements indicate exactly what they say, although it can seem confusing.

“Updated” indicates that the business agreed with your dispute or at least found changes were necessary. As a result, the business updated the account information with Experian.

“Closed” indicates the account was closed either as a result of your dispute or already had been closed and can no longer be used to make additional charges.

“Account closed by grantor’s request” indicates the business asked that the account be closed. In the past, when an account was closed at the grantor’s request, it was considered negative because it almost always indicated the account was in default. That is no longer the case.

Today, who closed the account is unimportant. Accounts are opened and closed so frequently today that who requested that it be closed is not considered by credit scoring systems or businesses. For instance, consumers “credit card surf,” opening and closing multiple accounts in search of low interest rates and better incentives.

The important issues now are whether or not the account payments were current when it was closed, if the payments had ever been late, how late the payments were if there were delinquencies, and how long ago the delinquencies occurred.

A closed account is no longer active. If the account has a zero balance, you have no more payments to make. If the account is closed to further charges, but there is a remaining balance, you still need to repay that balance. If there is a past due balance and the creditor closed the account, very likely the creditor will charge it off to bad debt and sell the account to a collection agency. I suggest you contact the creditor immediately and make sure you are in agreement about the outstanding balance.

Thanks for asking.

- The “Ask Experian” team

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