I settled and closed a delinquent account almost five years ago and the creditor is still reporting. How can they do that if the account is closed?
Your credit report represents the history of your accounts. When you pay off or close an account, the lender updates the account to reflect the new payment status of the account. However, closing or paying off an account does not cause it to be removed immediately from your report.
Settled accounts are potentially negative and remain for seven years
Settled accounts stay on your credit report for seven years. Settling an account for less than the full balance owed is considered potentially negative because you did not repay the entire debt as agreed under the original contract. If the settled debt has no history of late payments — called delinquencies — the account will remain in the credit report for seven years from the date it was reported settled.
If there is a history of late payments, the account will be updated to show that is settled and will remain in your credit report for seven years from the date the account first became delinquent and was never again current. That date is called the original delinquency date.
Thanks for asking
Daniel Sayre, Client Services Manager