An overdraft is not a loan...
Have you ever come across an unresolved overdraft in your credit report and wondered why it comes up as a performing account status?
Or have you ever wondered how your accounts are classified in a credit report?
Then this is for you.
Let’s run through how your transactions is classified on a credit report and find answers… (Shall we?)
So generally, your ‘Account Status’ simply implies you have been repaying a debt according to the agreement between you and the lender or creditor. Every item listed on your credit report includes a space for the creditor to report its status.
A creditor can either report an open, closed, or written off account status.
What does this mean?
An open account entry simply implies a running or active loan.
One with a closed account status has no ongoing loan.
A written-off account has been cancelled based on an agreement between the creditor and the debtor.
At this point, you probably get the different account status types, right?
Great! So, let’s dig a little deeper into different elements of an open account status because that’s really when the magic (classification) happens. Loans cannot be classified if your account is not open.
When your account status is open, it is either of two variables – A performing or a non-performing account.
A non-performing account simply describes a delinquent or derogatory account which could be;
A performing account usually has one of the following
Now you know how to decode items on your credit report. If you enjoyed reading this, let us know and share with others.
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