Canceled By Credit Grantor (2023 Explanation)

If a creditor closes a line of credit with or without the customer’s knowledge, the account will be coded as “canceled by credit grantor” on the consumer’s credit report.

Another code that may be used is “closed by credit grantor”, which refers to the same thing.

The message will stay on the account for its remaining reporting life, typically 6 years and 9 months after the date of last activity.

The reason behind the cancellation could be due to:

  • customer’s payment patterns or lack thereof
  • account inactivity
  • the account was associated with another account containing repeated delinquent payments
  • the credit grantor ceasing operations or going out of business

Depending on the situation, the customer’s credit score may be affected.

Is “canceled by credit grantor” a bad thing?

When a creditor closes a customer account, it does so because a change in customer behaviour has triggered a review of the account.

The creditor will take necessary steps to limit potential loss by closing the account, under the following circumstances:

  • there is a pattern of late payments
  • transactions have gone beyond the credit limit
  • there is activity signaling that the borrower is overextended and having trouble using credit responsibly

The “closed by credit grantor” action creates a negative impact on the credit score, more so when the credit line has an unpaid balance.

Impact on credit score

Having an account in this status is a red flag to all creditors present and future, who rightfully understand there is a potential that the borrower may be in some sort of financial trouble.

How do I remove “canceled by credit grantor” from my credit report?

There are typically just three ways to have the “canceled by credit grantor” statement removed from your credit report.

The creditor agrees to reopen the account

This usually happens when a consumer’s situation has drastically changed for the positive.

Perhaps previously high balance accounts are now paid in full and the borrower’s debt to income ratio is acceptable.

Debt to income ratio

Whatever the reason, reopening the account will eliminate the “closed by credit grantor” description.

The account is removed entirely from the credit report.

This process involves negotiating unpaid balances in trade for the account being removed from all three credit reporting agencies.

In many cases, an attorney or credit repair agency must get involved to assist with the negotiations.

Ask the creditor to remove the account without offering anything in exchange.

Chances of this working are slim to none, but there is always a possibility the unique details of your particular situation will warrant empathy from the creditor.

Negotiate with your creditor

It can’t hurt to ask, especially if you have no means to negotiate an unpaid balance.

If this fails, ask if they can remove only the phrase from the account reporting. Again, it is unlikely but the worst that can happen is that they refuse and the situation is no worse than it was prior.

Can a credit card be closed without notice?

Creditors are not required to tell you before they close an account.

This information should be explicitly stated in any disclosure agreements at the time the credit line is opened.

The creditor can, at their discretion, close the account to mitigate loss if they so determine that the risk for delinquency and default has increased.

Why would a credit card company close my account?

The typical reason your credit card account is closed would be due to consistent late payments.

Late payment notice

Late payments, however, are not the only reason a creditor might close an account.

Changes in credit usage are monitored closely. Some situations that trigger an account to be reviewed:

  • the balance begins steadily climbing
  • the customer has made multiple high interest cash advances
  • the credit card is maxed out or over limit
  • the monthly payment amount drops significantly to the minimum required
  • large payments are made monthly but the balance immediately increases

Depending on the creditor, the borrower’s overall creditworthiness, and the amount of time the negative behaviours persist will determine if the account is closed.

However, account closure may not necessarily be the fault of the borrower, such as in cases where the credit grantor goes under.

In this scenario, a debt collector or a new creditor will most likely be assigned collection authority, which means you will still owe money.

Whichever the case, the remark “canceled by credit grantor” will appear in your credit report as a result, regardless of whether it was originally without blemish.

Why would a credit card company close my other accounts as well?

The increase of risky behaviour on specific credit lines will often cause other accounts to be reviewed.

Typically, this occurs when both accounts are owned by the same creditor.

Multiple credit accounts

For example, a consumer has two accounts with Bank of America:

  • One has a $1000 credit limit and perfect payment history.
  • The second has a $6500 limit with a balance that is often over limit and has had multiple late fees over the last 6 months.

When this borrower is flagged as an increasing risk for default on the $6500, all accounts will be evaluated.

When a decision is made to close the $6500 credit line, it is very likely the $1000 credit line will be closed also.

This way, the potential default risk is $6500 rather than $7500.

“Closed by credit grantor” on any account causes the customer credit score to drop for two reasons:

  1. A closed credit line naturally decreases available credit, so the usage amount appears to increase with less credit available.
  2. Additionally, to have an account closed by a credit grantor is a fair indication that a customer is in financial trouble.

In general, a decrease in credit score triggers a review of customer credit lines. So, there is a real possibility that other creditors will also close the accounts associated with the same customer.

Why did my bank close my account with zero balance?

A borrower may go through a stretch of behaviour that negatively impacts their credit score.

If they manage to pay off the credit line in full while the account is still open, it may be a surprise when the lender opts to close the account.

Even with the balance at zero, the credit grantor may choose to close  the account immediately or when the account comes up for annual review.

Account closed

A zero-balance account can also be closed if it is inactive for a significant amount of time (the length of which is determined by the credit grantor or lending regulations).

Closing unused accounts decreases risk for the borrower, as it will reduce any chance of identity theft (such as someone opening a credit card or disaster loan under your name) or other illegal activity, such as unauthorized hard inquiries, to which such accounts may be prone.

Will a bank reopen a closed credit account?

Possibly, but if the closure was due to derogatory behavior, it is unlikely unless the customer financial situation has drastically improved.

Lenders generally are reluctant to reopen credit accounts once they have been closed.

Paying the balance in full prior to making a request to reopen may increase the customer’s chances.

However, the decision will still be subject to a lending criteria that may not fair so well for a borrower with recent derogatory credit history.

What happens if you owe a bank money and they close your account?

If there is an outstanding balance, payments must be made until the balance is zero.

Monthly statements will continue to generate and all terms and conditions still apply. The customer remains fully under obligation of repayment.

Credit card statement

I can’t pay my debts, what options do I have?

It is fair to say that many people in the U.S. are in this situation due to a variety of circumstances.

However, relying on credit to live is usually a fast road to a long financial recovery.

There are better resources to help people who are in financial need. Depending on the individual financial circumstances, and whether it is short term or long term, there are options:

  • Consumer Credit Counseling Services: These organizations have counselors in every state. They are often non-profit and will help consumers work with creditors to pay off debt at minimal or zero interest. They also provide help with the following:
    • Budgeting
    • Debt management counseling
    • Housing counseling
    • Bankruptcy counseling
    • Student Loan counseling
  • Essential Community Services: Calling 211 will connect to a completely free service that directs anyone to the help they need. It is offered in multiple languages and is available 24/7. It provides information and help for urgent situations as well as longer term:
    • Housing
    • Utility assistance
    • Food
    • Employment assistance

How can I stop my bank account from being closed?

Prevention is always better than a cure. Here are a few tips on preventing closure of any of your credit card accounts:

  • Use credit sparingly: Always pay on time, and pay off monthly or in as few payments as possible.
  • Be very cautious with credit limits: A good rule of thumb is to assume the limit is half of what it really is, so the maximum balance will always be less than half, which also reflects positively on credit score.
  • Communicate with creditors: If a financial situation is going sideways, it is always best to communicate with creditors, the earlier the better. Creditors have a vested interest in the financial success of their customers, and will do their best to provide options.


  1. This article is not entirely correct. Another reason that the phrase “canceled by credit grantor” may appear on one’s credit report is because the grantor went out of business. For example, I have a Fingerhut account, and the line of credit for this account WAS Webank. However, Fingerhut is no longer offering credit via Webbank, but now some new off brand bank. My credit history with them was without blemish, but because Fingerhut now secures their loans from else, the remark on this particular line of credit now reads ““canceled by credit grantor”, which again, was of no fault on my end.

    I hope this bit of extended clarification helps someone else.

    • Thank you for pointing that out Lesley. It certainly does happen on the rare occasion, particularly with smaller creditors. Regardless, we have updated the article to reflect this.

    • Same thing happened to me. Are you still making payments on the original Fingerhut account? Did you find a way to have them remove the cancelled by creditor? I hate that it looks bad on my report and I’ve never missed a single payment.

  2. Nearly everything I read is bad for the person with credit. I have excellent credit and all my accounts are on time, etc. I have had 2 accounts closed on me. Neither was for negative reasons (which is barely brushed over on this article). One was closed, far as I know, due to inactivity. Well excuse me for not wanting to use your card. This should not go against me. The 2nd was b/c the bank decided to sever ties with the company offering the card. No balance, nothing negative, but once again, this dings my score. How is this ok/fair? Fact is, IT’S NOT! Yet the companies do not care. They only care about the bottom line, PROFITS. Period, the end.

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