Expert: Regan Shinski - 10/8/2009

Question
Hi Regan,
I have a credit card at bank of america and have recently received a letter. They made an  amendment and are going to start charging a annual fee, so I will be closing the account. I have read I need to contact the credit bureaus to report the account was closed by comsumer so it would be easier to get a different card by someone else. Is this true and how do I report this to the credit bureaus. Thanks Tim

Answer
Hi Tim:

In theory you do not need to do this.  BOA should report it properly and usually the creditors DO report it that the consumer closed the account.  You should follow-up to be sure they do so by getting a copy of your credit reports - you should be doing this anyway for mistakes.  You can get one for free once a year at www.annualcreditreport.com.  Wait about 60 days after closing the account to be sure it is updated as closed.

If it is reporting incorrectly, you just dispute it by sending a letter directly to the credit bureaus.  Include any documentation or proof you have.  It should then be corrected in about 30 days.

BTW, this has no effect on your credit score - whether it's marked that you or the bank closed it.  The actual act of CLOSING the account can have a significant effect on your score, but WHO closed it is not factored into your score.  The only reason to have it corrected - and I think it should be correct - is in some cases like a mortgage or auto loan a MANUAL review is completed.  This means an underwriter physically looks at your credit reports, not just the score.  In theory, it may look bad to that person if the CREDITOR is closing the account against your wishes.

Good luck.  This is nothing to lose sleep over, but follow though and make sure it does get reported properly.

Regan