Accounts that are closed on a credit report but especially where an account was closed by the credit grantor due to nonpayment can greatly reduce the credit score. You may be wondering whether such credit repair service companies that are working to help consumers rebuild their credit history such as Lexington Law are capable of removing such accounts from your credit report. Now let us examine the effects of closed accounts on your credit and if a credit repair company can assist with the same.
Effects of Closed Accounts on Your Credit Rating
Once an account is shut, either by you or by the lender, the record of that account stays in your credit history for up to 10 years. Lenders also consider the number of recently closed accounts; if you have many accounts with a good payment history, it is beneficial to have your credit score.
They also consider the number of credit accounts that have been closed recently; many such accounts are usually disadvantageous to the credit score.
Here are some key ways closed accounts influence your credit:
Payment History: If the account was closed by the credit provider due to failure to honor your obligations in terms of payments, your record of payment history suffers. Credit history is one of the most important factors that contribute to the formation of the FICO credit score; it accounts for 35%.
Credit Utilization: Another disadvantage of closing an account is that the total amount of credit available reduces, and thus the credit utilization ratio increases. The paper also finds that higher utilization ratios increase credit risks and, therefore, reduce credit scores.
Average Age of Credit History: Recent closed accounts are detrimental to the rating since they constitute 15% of the FICO score depending on the account age. Older accounts also provide a greater boost to the scores.
Credit Inquiries: Closing many accounts voluntarily too close to each other might make lenders ask questions as to why and result in more inquiries when obtaining new accounts.
As you can see, closed accounts were indicated to affect several key scoring factors because if an account was closed due to the nonpayment of accounts or overcharging of credit limits, this is detrimental. The good news is credit repair services loudly proclaim that they can delete the same closed accounts from your credit report, which would also reduce the above effects.
Yes, Lexington Law Will Remove Closed Accounts.
Lexington Law is all parts a large credit repair firm and one of the most popular ones in the market. The companies say they can expunge a list of credit report items deemed unfair or inaccurate and, in some instances closed accounts.
But let’s see what their process looks like and what you should anticipate when you avail of their services.
Here’s a quick overview:
Review Your Reports: Equity Legal has your credit reports from Equifax, Experian, and TransUnion and reviews them for negative, inaccurate, or suspicious items that can be deleted by consumer law. Such accounts fall under this category of accounts Closing accounts include the accounts of customers who are no longer active in their business with the enterprise.
Initiate Credit Bureau Disputes: From their investigations, Lexington Law formally challenges the credit bureaus by disputing any entries they consider should not rightly be included. This is because according to federal law, the credit bureaus have to come up with a response within 30 days.
Provide Relevant Evidence: Through statutes such as the Fair Credit Reporting Act, Lexington Law presents arguments to the credit bureaus why accounts marked may violate these laws. Accounts that have been closed and that the customer feels were charged erroneously often fall under this case.
Pursue Escalated Repair Methods: If there is a failure in arguing on the initial bureau disputes, Lexington Law proceeds with the appeals process using sophisticated credit repair methods. They directly apply to the management of the credit bureaus as high in the chain as possible to have as many unfair credit report items deleted as possible.
According to Lexington Law, through this elaborate disputing process, they have been able to obtain very high success rates for their clients when it comes to the removal of closed accounts especially those that include complicating factors that may have led to the closure of the account.
Nevertheless, it is also crucial to recognize that credit bureaus have proper reporting guidelines in their compliance manual for reporting legitimate closed accounts resulting from the consumer’s lack of action, which includes nonpayment over a long period. So it is only reasonable that results may differ in one or another situation.
All in all, credit repair services such as Lexington Law give customers professional advice and active help that consumers may not have time or knowledge to attempt to close account disputes on their own. This can greatly help to lessen the load and increase your chances of achievement when trying to get removed from the credit report any accounts that have been closed for any reason except by your actions.
The key takeaways when it comes to closed accounts and the process of credit repair are:
Here are some key final points to remember when it comes to getting closed accounts removed from your credit report:
- It may be closed but still is listed on your report for 7-10 years depending on its type and still affects the credit score in several ways in the duration.
- Companies such as Lexington Law employ credit bureau disputing strategies and legal impact to try to get closed accounts and other negative items removed from your report.
- So, it means that the probabilities of removing items may differ from one individual to another depending on the credit status and activities, including the account closure or termination, when the aim is to remove entries.
- Indeed, credit repair companies that have been in the industry for some time are equipped with professionals, and a system of credit dispute that is more efficient than the individual attempt in many cases.
As to the closed accounts, time remains the only guaranteed way to get rid of them, although professional credit repair services can work considerably faster using legal protection for consumers. Among the firms that are dedicated to assisting in such challenging and specific credit situations, Lexington Law is one of the prominent ones.
Perhaps this will help you get a clearer perspective of how Lexington Law can try to erase legitimate, closed accounts for its clients. Please call for a free consultation on a solution suitable to your credit situation or for further information.
Call now for expert credit repair services: (888) 803-7889
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