As you work to build your financial future, old credit accounts that were closed long ago can continue to affect your credit report and damage your score. Even after paying off debts, the accounts remain listed for seven to 10 years and can lower your score by decreasing your credit history length and increasing your utilization ratio.

Taking proactive steps can remove closed accounts and improve your score to qualify for new credit and better interest rates.

DISPUTE INACCURATE DETAILS

You can dispute any inaccurate information with the credit bureaus to remove closed accounts from your credit report. Check your credit reports closely and look for any errors regarding the closed account, such as an incorrect balance, false status, or improper dates. Send a formal letter to the credit bureaus disputing the errors and providing evidence to support your claim. The credit bureaus are required by law to investigate and correct any inaccurate information.

WRITE A GOODWILL LETTER

You can also request the removal of a closed account by writing a goodwill letter to the credit bureaus. A goodwill letter is a formal request asking the credit bureau to remove a closed account from your credit report as a courtesy. Politely ask the credit bureaus to remove the account to improve your credit score.

Some tips for writing an effective goodwill letter include:

  • Address the letter to the credit bureaus reporting the closed account: Equifax, Experian, and TransUnion. It is better to send a separate letter to each bureau.
  • Clearly state that you are requesting to remove a closed account from your credit report. Provide details about the account, including the account number, if available.
  • Explain why removing the account would benefit you, e.g., to improve your credit score or correct an inaccuracy. Keep your explanation concise and professional.
  • Take responsibility for any mistakes and assure the credit bureaus that you have learned from your experiences. However, do not admit any illegal activity.
  • Thank the credit bureaus for their consideration of removing the account. Provide your contact details so you can be easily reached if they require additional information.

WAIT FOR THE ACCOUNT TO BE REMOVED

Most closed accounts in good standing will remain on your credit report for 10 years from the date of the last activity before dropping off automatically. Charge-off, repossession, and foreclosure accounts can last seven to 10 years. If waiting is an option, continue using credit responsibly, and your score should rebound over time as the impact of the closed account lessens.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.