Account Canceled by Credit Grantor: What Does It Mean?
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Have you ever come across the alarming phrase “account canceled by credit grantor” on your credit statement? This is something many people run into that often leaves them feeling concerned and anxious, but what does it mean in reality?
Understanding a credit card statement can be challenging and is often a stressful process, so we’ve put together a helpful guide that will tell you everything you need to know about a credit grantor, what it is, how it works, and what happens if they cancel your account — as well as whether this is likely to have an impact on your credit score when you next try to borrow money.
Key Takeaways
- If your account shows as "closed by grantor," it simply means the credit issuer or service provider closed the account. This can happen for various reasons, such as inactivity, balance transfers, or preventive measures against fraud. It's a routine occurrence and does not necessarily indicate any issues.
- Having an account closed by the credit grantor typically does not affect your credit score, especially if all payments were made on time. Your credit score is more influenced by factors like payment history and credit utilization rather than account closures.
What Is a Credit Grantor?
A credit grantor is an entity, typically a financial institution, that extends credit to a borrower. This includes banks, credit unions, credit card companies, and other lending institutions that provide loans, credit cards, or lines of credit. The credit grantor evaluates the borrower's creditworthiness (the borrower can be both an individual or a business) and determines the terms and conditions under which credit is granted.
In short, a credit grantor refers to the credit card issuer or someone who has granted a form of credit to a person or business. Any business that lends money or offers services or goods on credit can be referred to in this way. As a result, credit grantors can refer to a wide range of organizations, not just credit card companies (although that is what the term typically refers to).
That’s all there is to it — so anybody with a credit card or borrowed money is likely to have a credit grantor. Many people will, therefore, see things referring to “credit grantor” on their statements, and there’s no need to be worried about this.
What Does “Closed By Grantor” Mean?
It is fairly typical to see this statement, which merely indicates that the card issuer (or account provider) closed the account. The phrase doesn’t necessarily mean that any problem has occurred; it simply means that the account has been closed. Sometimes, it can be because an issue led to the withdrawal of the service, but frequently, it’s just a sign that the service provision has ended.
In some cases, references to the credit grantor on a statement will not indicate whether the account was closed by the cardholder/service holder or the provider, but if you see “closed by grantor,” that does suggest the service was withdrawn by the service provider (the grantor). That may leave you wondering if this is going to cause you problems.
Is It Bad To Have “Canceled By Credit Grantor” on Your Credit Report?
Because this phrase looks so alarming, many people assume that it indicates the lender has a problem with the lendee, or, in this case, they have a problem with you. However, the phrase does not indicate a problem, but, in most cases, means that the service or credit line was closed. Here are the most likely reasons:
- Not using the account. Lack of use on an account will often lead to it being terminated for security reasons, so if you see a creditor account has been closed and you haven’t used it for a while, this could be why.
- Transferred balance to a new account. If you moved your credit line to a new card or provider, you may see this message.
- Suspicious activity. Alternatively, if there’s any fraudulent activity on the card or suspected fraudulent activity, there’s a chance that the provider will close the account to prevent any further issues.
If none of those sound right and you want to understand what’s going on, you can always phone the creditor directly and ask why they closed your account. You might be able to reopen it, or you might need to create a new account.
Will the Comment Affect Your Credit Score?
This comment will not usually have any impact on your credit score. However, there are scenarios where other actions related to this comment do impact your score.
For example, this comment could stem from a transfer of your account to a collections agency. In that case, you could see negative impacts on your credit because of the debt collection.
So, Provided the account shows that you made all your payments on time, as required, there will be no impact on your credit score. Prompt payment is far more significant in determining the impact on your credit score than whether the account was closed by the provider or not.
Related: Four ways to help pay off credit card debt
What Is a Credit Grantor on a Rental Application?
If you’ve got a rental application that requests you fill out a credit grantor, they are looking for a credit reference.
A credit reference will help your prospective landlord understand how likely it is that you are going to make rent payments on time. This can therefore be any institution that you have had a financial relationship with in the past.
That might be a credit card company, a bank, or possibly another individual. In some cases, you can use previous landlords, as they will have a good sense of your financial approach to rent. In many cases, people use old landlords for this section specifically because they are well placed to state that you are responsible and will cover your rent.
It’s important to be aware that a credit grantor isn’t the same as a guarantor. A guarantor is somebody who guarantees that they will pay your rent for you if you don’t pay it yourself. In most cases, this will be a close relative, such as a parent, but it could be a friend.
If you’re unsure about anything on a rental application, it’s a good idea to call the rental agency and get clarification so that you can fill it in correctly. Many rental applications do require credit references, such as credit grantors but do check before you put information in this box.
Can You Remove an Account from Your Credit Report After It Has Been Canceled by the Credit Grantor?
The best thing to do is call the service provider If you don’t want an account to appear on your credit report. You can request that they remove the account permanently from your credit files. This will erase it from your history and prevent it from having any impact on your credit score.
However, there’s no guarantee that this will work. Companies are not obliged to grant this kind of request, and the closed account may remain on your credit report. There are no fail-proof methods for removing it.
As you can see, you don’t need to panic if you see the phrase “account canceled by credit grantor” on your credit score, because this won’t have any impact whatsoever on your credit rating in today’s world. All this phrase indicates is that you no longer have service with a company you could previously borrow money from because they have stopped providing this.
Luckily, this phrase doesn’t affect your credit score, so it won’t impact your ability to borrow money in the future. It’s not bad to have this appear on your report, and indeed, it is very common, because so many people use credit cards and swap services regularly these days.
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