A closed credit account is locked, meaning no transactions can be performed. A closed account can, therefore, be positive or negative depending on traces of the closure and clearance paid amounts in full or partly. A positive closed account will show a good history of managing credit obligations by the consumer, and a negative closed account indicates defaults or skipping payments on the credit obligations raised by you and questions your credibility. Unless you do something to remove the closed account, it will remain on your report file for as long as seven years, reducing your credit score. In this article, we will take you through how to remove a closed account from your credit report in South Africa and why that’s necessary and advisable.
How to Delete a Closed Account From A Credit Record
To remove a closed profile from your credit record, get a copy from one of the South African credit agencies: TransUnion, Experian, Compuscan, or XDS. Review it meticulously, identifying closed accounts for removal and checking for inaccuracies. Dispute errors with the bureau, providing evidence to support your claim. However, not all closed accounts can be removed, even if accurate. The National Credit Act allows bureaus to retain information for a specific duration, depending on the account type and status. If the account falls within these categories, removal is possible only with a valid reason, like fraud, identity theft, or a creditor dispute.
How to Write a Letter to Credit Bureaus Asking to Delete Closed Accounts
If you have a valid reason for deleting the closed profile from your credit statement or the account is very archaic, you may write a letter to the credit agency requesting them to remove it. This formal communication should contain the necessary information and supporting documents.
Here’s how to craft such a letter:
- Address it to the relevant bureau, including your name, location address, contact number, and ID.
- State your purpose and identify the closed account you wish to remove, providing the account number, creditor name, and closure date.
- Explain your reasons for removal, backing up your request with evidence. Attach relevant documents if the account was closed due to fraud, identity theft, or a dispute. If the account is outdated, attach a copy of your credit report showing the closure date and removal timeframe.
- Request the bureau to remove the account within 30 days, update your score, and send a confirmation letter and updated report once done.
- Sign and date the letter, retaining a copy for your records.
Do You Need to Pay Off Closed Accounts on Credit Report?
You might wonder if you need to pay off closed accounts on your credit report. The answer lies in the account’s condition, type, and your deal with the lender. If the creditor locked the because of default or delinquency and you still owe cash, you’re legally required to clear the dues unless it’s been written off or prescribed. Failure to do so may result in legal action, affecting your credit grade and monetary standing. If the account was closed due to inactivity or settlement and you’ve paid the debt in full or agreed to a lesser amount, further payment isn’t required unless there’s a breach or error. However, maintain payment records and settlement agreements for potential disputes.
Do Closed Accounts Affect Buying a House?
It depends on the account status and type and the lender’s policies. Closed accounts paid in full and on time can positively influence your credit score and home-buying ability, reflecting responsible debt management. Conversely, delinquent, settled, or legally-actioned accounts can negatively affect your score, indicating a troubled credit history. Too many closed accounts can also lower your score and signal high credit utilization, suggesting over-reliance on credit. Thus, removing negative or outdated closed accounts could be beneficial. However, it’s not always straightforward due to certain rules and procedures.
How Long Does A Closed Profile Remain Active on Clear Score?
ClearScore is another Internet-free service that gives you access to your Experian credit statement and rating, one of South Africa’s four main credit agencies. It allows you to improve your rating and helps you with everything it has at its disposal.
If you’re curious about how long closed accounts linger on your Clear Score report, it’s contingent on the account type, status, and the bureau’s policies. For instance, credit inquiries remain for 12 months, missed payments for 5 years, and debt restructuring until a clearance certificate is issued. Defaults and court judgments stay for 5 years or until settled.
However, these durations may differ among bureaus due to their unique information collection and reporting methods. It is, therefore, advisable to pull your credit report from all four South African bureaus, TransUnion and Experian, among others.
How Long Do Accounts Remain on Your Credit Statement in South Africa?
An account remains on your South Africa credit report, depending on the general account type, the status, and that bureau’s policies. The National Credit Act provides guidelines:
- Fully paid accounts can remain for up to 10 years.
- Delinquent or arrear accounts stay for up to 5 years.
- Accounts settled for less than the full amount also linger for 5 years.
- Accounts subject to judgment, administration order, sequestration, or rehabilitation stay for 5 years.
- Accounts under debt review or counseling remain until the debt is cleared or the review is canceled.
If you wish to remove an account within these categories and timeframes, it’s possible only with a valid reason, like fraud, identity theft, or a creditor dispute backed by proof.
