[1]Photograph Credit: Microsoft Images
Today I will complete the first of four categories housed in Box 1 of my important documents [2]. I use an accordion file, and this first box contains four tabs with the names of each category. The first tab reads, “Credit Report/Card Documents.”
Three of the accordion file slots contain information under this topic. The first file houses our credit reports [3] and FICO credit scores [4]. The second file holds copies of our active credit cards and accompanying documentation [5]. The third, and final, file slot contains closed account letters from corresponding credit card companies.
When Paul and I joined our finances after marriage, we each had individual accounts. In an effort to consolidate our accounts, we closed most of our accounts. We kept open the oldest account for each of us.
Our reasoning – the FICO score is based on a number of criteria. One of which is the length of time you have held an account in good standing. To keep our FICO scores as high as possible, we kept open two of our individual accounts.
CLOSING ACCOUNTS
As I closed our accounts, I requested that the bank or issuer send a letter stating that “our account was closed by consumer.” I then placed these letters in the third file of my Box 1 documents under the category of Credit Report/Card Documents.
AFTER CLOSING ACCOUNTS
After receiving our credit report(s), I checked the closed accounts to verify that one of these comments was listed: “account closed at consumer’s request,” or “account closed by consumer.” Having this comment shows any potential creditor that my account was closed at my request rather than by the lender for inactivity or past due balance. (Since most creditors look at your credit score rather than your credit report, some people think that this distinction does not matter [6]. If you apply for a mortgage, line of credit, large personal loan, or car loan, then the lender will pull the full credit report, and the comments may be a factor. Even though I do not plan to apply for more credit, I prefer to err on the side of being too careful than not careful enough.)
I also review our credit reports to see all of our closed accounts. These accounts will continue to report on your credit report for up to 10 years. I then check my closed account letters to be sure I have a corresponding letter for each account closed. If I am missing a letter, then I contact the issuer and request a letter stating that the account was closed by consumer.
When I went back to request two of these letters for old accounts that had been closed, I did have two companies who had purged their files. One of these was my first credit card which was co-signed by my parents. Since the bank account to which the credit card was linked was no longer active, I had to work my way up the chain of supervisors until I received my letter. You may not be as persistent. But if there ever is a problem with that account, I have the documentation to back up my standing.
TIP: Requesting the closed account letter at the time of closing the account saves lots of time and energy!
Setting up this first category is very time-consuming. I worked for about 2 – 3 months to get this one category complete, and I’m so thankful I did! All my documents are together. I now spend a little time maintaining it. I used my time wisely by investing my energy into getting it right the first time. I wish you much success as you plug away at this daunting task.
The rest of the categories in this box do not require as much research. I will help you get your documents in order as we proceed next week with the second category – Important Personal Documents. Keep using your time wisely, and keep up the good work!