Closed Accounts Should Read “Closed By Consumer”
One popular rumor about credit scores is that a finished account that that does not read “closed by consumer” will cause a huge plunge in your numbers. This is thought to happen because a lender will read your report and assume that a creditor closed your account after becoming exasperated with you somehow. It can mean you did not use your credit or that the creditor treated a loan from you like a charge off.
The reality is that many never lenders actually see your actual report. They are looking at a credit score – a number accessed through a computer. They couldn’t really care less about who closed a credit card the same way they don’t care about a 100-word comment that explains negative comments.
Fair Isaac contends that if a lender shuts down your account it is either because you defaulted or because the account has been inactive. If the account has been inactive that will be generously documented in the account’s history anyway.