I consolidated my school loans last year. Should I work to have those closed accounts removed? There are several of them. I don't know, even though they're showing as in "good standing," if they're hurting my score or not? What does in "good standing" mean on my credit report?
- TGR
Dear TGR,
When talking to lenders, the definition of the term "good standing" may vary from one to another. For instance, some lenders may consider only accounts that have never been late to be accounts in good standing, while others may consider an account with past delinquencies to be in good standing once the payments have been brought current.
The definition of "good standing" on a credit report is not necessarily the same as the lender's definition. An account in "good standing" is an account that has no negative payment history, past or present. If an account has had even one late payment, then it would be considered "potentially negative."
Open and Closed Accounts in "Good Standing" on a Credit Report
Open, active accounts in good standing remain in your credit report indefinitely.
Closed accounts that were never late are considered positive and will appear under the section "Your accounts in good standing" on your Experian credit report. Experian keeps positive accounts on your credit report for up to 10 years from the date they were closed. Accounts with negative information remain only seven years from the original delinquency date.
Because positive accounts help your credit history even after they are closed, keeping positive credit information on your credit report longer than negative information helps you establish a long history of good credit management. It will also help you recover from any credit difficulties you may have had in the past.
As long as your previous student loan accounts show that they were always on time and are now paid and closed, having them on your credit report is beneficial for your credit history and will not hurt your credit scores.
Thanks for asking,
The "Ask Experian" Team