Should I close some of my credit accounts?

DaveInAZ · ‎10-17-2014

To optimize my FICO score, should I close some of these accounts? Reason I ask is because before reading this forum more thoroughly I recently tried that bogus "pre-qualifier" at Discover that claimed I was perfect for the Discover It, and then promptly rejected me when I applied. I only had 2 inquiries on my record prior to that, so not a disaster, just aggravating. Discover just listed BK & Current and/or past delinquencies (there are only pre-BK lates) as the reason, but the Equifax report they used gives me a Fico of 673 and lists 'lack of recent loan info' & 'too many accounts w/balances' as the key factors affecting my score (in addition to BK & pre-BK late pays). When Equifax says 'lack of recent loan info' I assume they mean installment loans? That lack of installment loans came up often and one of the reasons I opened the Prosper loan. It shows up in TU, maybe they don't report to Equifax?

I was discharged Jan. 2011, and currently have these credit accounts: (Name/Date Opened/Current CL)

Visa/MC:
Best Buy (Citi) Rewards MC/ 10/2011/$1000
Merrick Bank Visa/12/2011/ $3100
Barclays Rewards MC/ 4/2012/ $5700
Cap One Rewards Visa/10/2014/ $10000

Store Cards:
Target/TD Bank/12/12/ $200
Walmart/Synchrony/ 2/2013/ $2400
Amazon/Synchrony/ 4/2014/ $1200

Installment:
Prosper/6/2014/ $5000 loan, now $4500 bal.

Not Reporting:
PayPal Credit/BillMeLater/6/2008/ $1750

- Bill Me Later/PayPal actually survived my BK, I owed $0 & didn't list it & they didn't close it. But they never report anything to the credit agencies, problably only if I was delinquent. My first post BK CC was a secured Orchard Bank MC, I closed it when I got Best Buy & Merrick, it now shows as a postive closed account for Cap One, which bought Orchard.

Amazon Store Card is my prime candidate to close after PIF payment posts today. I get reward pts when I use MC/Visa instead, I only opened it because they offered a $25 credit on the account when I opened it.

I want to close the BB Rewards MC, lowest CL and a $59 annual fee posts next month. Cons against closing: Oldest current credit account, and I more than make up that annual fee in BB Reward certs., and it's an "in" with Citi Bank, which I burned for $18k in BK (but for some reason they don't show in CR) Pro: Hard to keep it under 30% utlitization w/ that low a CL - I actually had to pay the statment balance +$120 today to keep it under 30% for next statement. It was opened with HSBC, who sold it to Cap One. CIti took over all Best Buy's biz last year, so it shows up as a postitive post-BK closed Cap One account and a positive post-BK current account w/ Citi. I'm leaning toward closing it and then applying for a BB Store card w/ no annual fee + RZ certs from Citi to see how much they have "forgiven".

I'm on the fence about closing Target. It's an older account, and it gets me 5% discount + free shipping w/no min. online. It opened with a $1k CL, I spoke with a rep this week who told me it was lowered because of inactivity - I'm an hour away from the nearest store so I use it pretty much only online, and didnt't buy much last year. Rep said she would put it up for review, if they raise it back up to $1k CL I'm inclined keep it.

It's about time for new car and I'm trying to hold off until I get my Fico over 700 for the better interest rates. I just got that Cap One MC w/ $10k limit this week, and it when it posts with a statement that large CL should boost my score. So, trying to do anything else I can to help.

0REDSOX7 · ‎10-17-2014

Closing any account will not impact your AAoA. There is a common misconception that the accounts need to be opened to be factored in to the account, when in reality, that's not true. I would close any accounts that have an AF if I were you.

The target card - you can get a Target Debit Card that links to your account and gives you the exact same benefits. Obviously it doesn't report anywhere, but that is an option to you if they don't raise the limit.

I have read that Citi is pretty much impossible to get back in with immediately post discharge - they usually wait like five years from before considering, so you take the chance they won't take you back - even if it is a store branded cards.

I'd go with the Amazon and Target if I were you and going to close anything. There are alternatives to the target card and you don't seem like you use the Amazon one. The PayPal and Amazon are both backed by Synchrony - so expect some adverse action if you close one and not the other. It happened to me once.

What's odd is that Equifax supposedly deletes payment history prior to bankruptcy filing - so how can they see it? TU does the same thing. I know it remains on Experian.

BK Discharge 2/11/14

Currently in the garden.

Scupra · ‎10-17-2014

Closing accounts won't optimize your FICO score. I think closing a card is based off your needs and if there is an AF On the Amazon card, why close it? It doesn't cost you to keep it open, Sync is decent with increases, it racks up ontime payment histroy, isn't a toy limit and they have 0% offers almost all the time.

DaveInAZ · ‎10-17-2014

Thanks for the info & advice Redsox & Scupra.

The target card - you can get a Target Debit Card that links to your account and gives you the exact same benefits.

- I never use debit - in a data breach or other fraud where they get your card # they empty your bank account and you're begging the bank to give your money back; with credit almost always zero liability, you get a new card in a week & you're on your way. Besides, I like the 30-40 days free money to pay w/ no interested charged with credit.

I have read that Citi is pretty much impossible to get back in with immediately post discharge - they usually wait like five years from before considering, so you take the chance they won't take you back - even if it is a store branded cards.

- Yeah, I've read that too. Well, I spent a bunch on that BB MC recently as if you spend $3500/yr. (on anything/anywhere) you get "Elite Plus" status w/ BB - free expedited shipping & other good benies. When the statement posts this month I'll have earned elite plus for another year, thru 3/2016, so if Citi turns me down for a BB store card, no biggie.

The PayPal and Amazon are both backed by Synchrony - so expect some adverse action if you close one and not the other. It happened to me once.

- Actually it's Walmart & Amazon that are Synchony. There is a PayPal branded MC issued by Synchronity, but I was talking about PayPal Credit, used to be called Bill Me Later - it's a line of credit connected to your PP account, instead of having a pile of cash sitting in your PP account you can just charge a purchase to your PP Credit line. But now you have me nervous that if I close Synchrony/Amazon it could adversely affect my Synchrony/Walmart, and I do like the Walmart card - you can get $20-60 cash back from the cashier when you use the card at WM, and when you PIF no charges of any kind. Not that I need that cash to get by, but free $$$ always brings a smile to my face,

So for now I'll close BB MC after statement posts this month. close Target if they don't raise my CL by the end of the month, and let Amazon store card sit w/$0 bal for now. The reason I don't care for the Amazon store card is that I don't shop Amazon much anymore, with my Elite Plus w/Best Buy I get better price/benies. When I do buy from Amazon I'd rather pay with a rewards MC/Visa and get cash back.

0REDSOX7 · ‎10-17-2014

I had a Paypal LOC called Smart Connect that was backed by GE, now Synchrony. Didn't know if it was same thing.

BK Discharge 2/11/14

Currently in the garden.

DaveInAZ · ‎10-17-2014

@0REDSOX7 wrote:
I had a Paypal LOC called Smart Connect that was backed by GE, now Synchrony. Didn't know if it was same thing.

No, maybe that was an earlier Paypal credit. From the Bill Me Later About Us:

About Bill Me Later, Inc

Founded in 2000, Bill Me Later, Inc. developed PayPal Credit and provides services for Comenity Capital Bank, the lender of PayPal Credit accounts. Bill Me Later, Inc. was acquired by eBay, Inc. in 2008, and is a PayPal company

GE/Synchrony is definitely not involved with PayPal Credit any longer.

DaveInAZ · ‎10-17-2014

@0REDSOX7 wrote:
(snip)
What's odd is that Equifax supposedly deletes payment history prior to bankruptcy filing - so how can they see it? TU does the same thing. I know it remains on Experian.

I just pulled my free annual report from all 3 credit bureaus 10/5. Actually my TU report shows extensive payment history on my discharged accounts. Equifax shows no payment or balance history, just Date Opened, Date reported (no date closed), Date Major Delinquency First Reported, Date of First Delinquency, Status (IIB), Comments: Bankruptcy chapter 7, Account closed by credit grantor.

Looked through my discharged accounts, most are showing Jun or Jul 2010 for 1st delinquency, when I stopped paying on them, and Sep 2010 as date major delinquency reported, when I filed BK.

SunriseEarth · ‎10-17-2014

@DaveInAZ wrote:
To optimize my FICO score, should I close some of these accounts? Reason I ask is because before reading this forum more thoroughly I recently tried that bogus "pre-qualifier" at Discover that claimed I was perfect for the Discover It, and then promptly rejected me when I applied. I only had 2 inquiries on my record prior to that, so not a disaster, just aggravating. Discover just listed BK & Current and/or past delinquencies (there are only pre-BK lates) as the reason, but the Equifax report they used gives me a Fico of 673 and lists 'lack of recent loan info' & 'too many accounts w/balances' as the key factors affecting my score (in addition to BK & pre-BK late pays). When Equifax says 'lack of recent loan info' I assume they mean installment loans? That lack of installment loans came up often and one of the reasons I opened the Prosper loan. It shows up in TU, maybe they don't report to Equifax?

I was discharged Jan. 2011, and currently have these credit accounts: (Name/Date Opened/Current CL)

Visa/MC:
Best Buy (Citi) Rewards MC/ 10/2011/$1000
Merrick Bank Visa/12/2011/ $3100
Barclays Rewards MC/ 4/2012/ $5700
Cap One Rewards Visa/10/2014/ $10000

Store Cards:
Target/TD Bank/12/12/ $200
Walmart/Synchrony/ 2/2013/ $2400
Amazon/Synchrony/ 4/2014/ $1200

Installment:
Prosper/6/2014/ $5000 loan, now $4500 bal.

Not Reporting:
PayPal Credit/BillMeLater/6/2008/ $1750

- Bill Me Later/PayPal actually survived my BK, I owed $0 & didn't list it & they didn't close it. But they never report anything to the credit agencies, problably only if I was delinquent. My first post BK CC was a secured Orchard Bank MC, I closed it when I got Best Buy & Merrick, it now shows as a postive closed account for Cap One, which bought Orchard.

Amazon Store Card is my prime candidate to close after PIF payment posts today. I get reward pts when I use MC/Visa instead, I only opened it because they offered a $25 credit on the account when I opened it.

I want to close the BB Rewards MC, lowest CL and a $59 annual fee posts next month. Cons against closing: Oldest current credit account, and I more than make up that annual fee in BB Reward certs., and it's an "in" with Citi Bank, which I burned for $18k in BK (but for some reason they don't show in CR) Pro: Hard to keep it under 30% utlitization w/ that low a CL - I actually had to pay the statment balance +$120 today to keep it under 30% for next statement. It was opened with HSBC, who sold it to Cap One. CIti took over all Best Buy's biz last year, so it shows up as a postitive post-BK closed Cap One account and a positive post-BK current account w/ Citi. I'm leaning toward closing it and then applying for a BB Store card w/ no annual fee + RZ certs from Citi to see how much they have "forgiven".

I'm on the fence about closing Target. It's an older account, and it gets me 5% discount + free shipping w/no min. online. It opened with a $1k CL, I spoke with a rep this week who told me it was lowered because of inactivity - I'm an hour away from the nearest store so I use it pretty much only online, and didnt't buy much last year. Rep said she would put it up for review, if they raise it back up to $1k CL I'm inclined keep it.

It's about time for new car and I'm trying to hold off until I get my Fico over 700 for the better interest rates. I just got that Cap One MC w/ $10k limit this week, and it when it posts with a statement that large CL should boost my score. So, trying to do anything else I can to help.

Closing cards won't help you improve your scores. If anything, it might lower them, since you could wind up raising your overal UTIL, not to mention that you'll have fewer accounts you can keep at $0. If Target and Amazon aren't useful, SD them. If Best Buy is worth the AF, keep it, but work on getting that UTIL down. If Citi was IIB, I definitely wouldn't risk closing it and not being able to get back in.

As for Discover, they aren't exactly BK friendly. There there IIB back in 2005 for me, and they still don't want me back.

And as for auto loans, check out DCU when you start your car shopping. I was approved for 1.99%; the only reason I didn't take it was because the dealer offered 0%.

DaveInAZ · ‎10-17-2014

@SunriseEarth wrote:
Closing cards won't help you improve your scores. If anything, it might lower them, since you could wind up raising your overal UTIL, not to mention that you'll have fewer accounts you can keep at $0. If Target and Amazon aren't useful, SD them. If Best Buy is worth the AF, keep it, but work on getting that UTIL down. If Citi was IIB, I definitely wouldn't risk closing it and not being able to get back in.

As for Discover, they aren't exactly BK friendly. There there IIB back in 2005 for me, and they still don't want me back.

And as for auto loans, check out DCU when you start your car shopping. I was approved for 1.99%; the only reason I didn't take it was because the dealer offered 0%.

Thanks for the response & info. What does "SD them" mean, I don't find it in the abbreviation list here. I just checked Best Buy and I got $75 in Reward Zone certificates last year, more than offsetting the $59 AF. And I logged in the account this afternoon and requested a CLI to $2k from only $1k and they approved it in minutes. So UTIL will be down, and yes, Citi Bank was IIB to the tune of $18k, so probably a good idea to stay with my accidental 'in' with them (they acquired BB cards from Cap One).

northface28 · ‎10-17-2014

"SD"=Sock Drawer.