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Why Does a Credit Report Say "Account Closed by Creditor"?

Triston Martin

Feb 25, 2024

Your credit report contains a wide range of information about your credit accounts. With some accounts, your creditors may include a message describing the state of the performance. While looking over your credit report, you could see that some closed accounts have the note "account closed at grantor's request" or "closed by grantor."

What Is a Creditor, Exactly?

The term "credit grantor" refers to the corporation that issued your credit card or another form of a credit to you.

The credit card issuer, also your credit grantor, has a lot of control over your account following the conditions of your credit card agreement. Your credit limit and interest rate are subject to change at their discretion. They have the power to charge you additional fees for specific transactions and as retaliation if you make a payment later than expected. However, occasionally your creditor may decide to shut your credit card account without prior notification.

How to Prevent the Credit Reporting Error "Closed by Grantor"

Most significant credit card issuers submit consumer account information details to at least three possible main credit bureaus on your account's open or closed state. "Closed by Grantor" might have appeared on your credit report when your credit card company, rather than you, shut your account.

Your credit card company may close your account for several reasons, such as you fell behind on payments, the card was inactive for an extended period, it was changed for a newer model, the creditor found fraud on the account, or you reported the card lost or stolen, the store that accepted the card has permanently closed, the economy has changed, or the credit card company is in the process of liquidating.

Credit Report

Credit bureaus are only allowed to disclose truthful information in your credit report. If a credit report item claims that your account was closed by a credit card company when, in fact, you requested the closure, you can dispute that information. Along with a certified postal return receipt attesting to the creditor's receipt of your request, provide a copy of your request to close your credit card.

However, if the comment is valid, it will stay on your credit report for the allotted credit reporting period. An account cancelled with negative information, such as being charged off, will vanish from your credit record after seven years.

Reporting Positive

Accounts that are closed in good standing will continue to show up on your credit report following internal policies of the credit bureau for reporting good closed accounts, typically ten years after the version ceases to be active.

Whether the comment will impact your credit score

You could be concerned about the impact a remark implying that the creditor terminated the account might have on your credit score. After all, having a high credit score is necessary to get your credit card and other applications accepted.

Fortunately, comments that your credit card company closed your account or that they cancelled your credit card (instead of you) won't lower your credit score. Comments are not factored into your credit score. Only the activity on your accounts is factored in for your credit score.

Instead of credit reports, prospective lenders usually examine credit scores because it speeds up the application approval process. No one will probably pay attention if you mention that the creditor closed your account. Even so, it won't affect your credit score often, mainly if the remainder of your report reflects favourably on you.

If you think your account was closed accidentally, you can inquire with your credit card provider about reopening it. Otherwise, paying off any outstanding bill as soon as possible is the most excellent way to protect your credit score.

What does the term "credit grantor" on a rental application mean?

A landlord may ask for the names of credit grantors on a rental application as a way to screen potential tenants. This, sometimes known as a "credit reference," can be used by landlords to verify that applicants have previously been able to make payments on time to another creditor.

After a creditor cancels an account, how do you erase it?

Getting accounts off of your credit record is challenging. Credit monitoring agencies are not required to erase accurate information even if there are mistakes in the report.7 Accurate negative information typically leaves your credit report after seven years unless you challenge it. Account cancellations with factual details and bankruptcies may stay on your record for ten years.

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