Payment history may cause “paid” account to be listed as “potentially negative”

Dear Experian,

I have a paid, closed account showing as potentially negative on my credit report. Why, if it shows paid, is it listed as a negative item?



Dear ORI,

Your question overlooks one crucial bit of information – the account’s payment history. Is “paid, closed” followed by the phrase “was ___ days late”? The blank would show 30, 60, 90 and so on.

A paid, closed account status is not negative, but the payment history doesn’t get deleted at the moment the debt is paid off. If the account payments were late in the past the credit report will continue to reflect that fact for a period of time.

As long as the late payments remain as part of the history, the account could continue to be viewed as negative by lenders, so the account will be included in the list of “potentially negative items” in your credit report.

The further in the past the late payments occurred the less impact they will have on credit scores and lending decisions, so paying off the debt was a positive step. In time, either the entire account or the late payments will be deleted, and the account will no longer appear in the “potentially negative” listing.

Thanks for asking.

- The “Ask Experian” team

Our policies for Ask Experian:

The information contained in Ask Experian is for educational purposes only and is not legal advice. You should consult your own attorney or seek specific advice from a legal professional regarding your particular situation. Please understand that Experian policies change over time. Posts reflect Experian policy at the time of writing. While maintained for your information, archived posts may not reflect current Experian policy. The Ask Experian team cannot respond to each question individually. However, if your question is of interest to a wide audience of consumers, the Experian team will include it in a future post.