A closed account is one that is no longer active or in use. Accounts may be closed for many reasons, some of which are:
– It was closed by the creditor, due to inactivity.
– You requested that it be closed.
– It was transferred to a new account. This can happen if you refinance the loan. In doing so, the old account is closed and the balance transferred to the new account.
– You paid it off. This would apply to loans, such as a car loan.
– Your creditor closed it because you had not been making payments on it. In these cases, unless you contact the creditor to make payment arrangements, it may go to collections.