17-Aug-2017 written by : FSI-Team
You started planning your finances and are thinking that you have too many credit cards which you don't need and the cards are giving you a hard time. When you first opted for a credit card it was just a need for emergency situations and you promised yourself, you will use it only when you need it.
Later when you were approached by various banks considering your excellent cibil score offering their credit cards you imagined, why not? But what actually happened was you took a lot of credit cards and you are using it for luxury expenses, one day you realize you have a scope to close one of the credit cards, you try to close it, but will that disappear from your credit report?
The answer to this question is a NO! Your cibil report provides a clear picture of your credit history and also reports your open and closed accounts. Especially with those accounts which had a lot of irregular payments.
Closing an account let's say a credit card's can affect your credit utilization rate and also your credit score. Not only it will affect your credit rating but also will be visible on your report though you won't be having the credit line on your disposal.
If you have made the payment from time to time in a home loan account without any default, the good standing will remain on your cibil report for at least 10 years. On the other hand if you have closed he account yourself reason for that being a negative payment history gets deleted after 7 years of the date it was filed. It's not only accounts which are closed or live appear on the report but also terms like charges-offs which stays for 7 years, foreclosure-7 years, if you have made an inquiry of the cibil report stays there for 2 years, bankruptcy for 10 years, and many such financial factors stay for a long period of time which one cannot evade.
When you close a credit card, it does not appear in your report as closed immediately. If you are regularly making payments of the remaining balance, the history will be updated every month until it is completely paid off. If you are making a payment which has been delayed for more than 30 days will be updated in your credit report and also will affect your cibil score. The credit card issuer sends the report of payments every 30 days to the credit bureaus.
If you have made the payments on time the accent does not go off your report, instead it will be shown as zero balance account.
If you have closed the card with the bank and there is some remaining balance, even if you make the payments on time the report will always show as closed. Now the closed title can indicate if it was closed by the individual, the card provider, it will be reflected in the cibil report. The closed account will definitely have impact on your cibil score and the future lenders can also dig in the reason of the account being closed.
You cannot remove the closed account before its fixed deadline; the window will always show you the message on the timeframe. It will always be suggested if you pull up your cibil report every year and check if there are any account which is affecting your score, which should have been gone till now. If something like this happens you can always file a dispute with the cibil bureau and get things sorted.
We understand no one likes to pay the annual credit card charges for nothing; instead you can stick with limited cards on your name. This will lead to healthy spending's and you will never face a problem of closing an account at all.