CC Company Closed account - how affect score?

[Anonymous]

Recieved a letter from CC company closing an account based on inactivity from that card and a negative account for a different card on credit report.  However, after reviewing, the neg. account is listed as Authorized User, I am not responsible for this account. While with the new rules an Authorized User account is not used in the FICO score, isn't a bank closing an account affecting my score?  If so, how do I resolve this? I have already removed myself as an authorized user from the neg. account.  I have never even used it.

[Anonymous]

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@Anonymous wrote:
Recieved a letter from CC company closing an account based on inactivity from that card and a negative account for a different card on credit report.  However, after reviewing, the neg. account is listed as Authorized User, I am not responsible for this account. While with the new rules an Authorized User account is not used in the FICO score, isn't a bank closing an account affecting my score?  If so, how do I resolve this? I have already removed myself as an authorized user from the neg. account.  I have never even used it.

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I am not sure about the effect of a CC you're on as an AU being negative on your FICO score.  However,  the only way that a CC closing by a creditor will affect you right now is your util.  So if you have $10K in available credit and $2.5K of that is used that at that point you have 25% of your available credit use.  Then a credit closes a CC of yours that is $5K, so that effectively takes you down to having $5K available credit and $2.5K is used, you know have 50% of your available credit used, that affects your FICO score.  Additionaly if a creditor closes the CC with a balance then you have a maxed out card, and that affects your FICO score. 

But simply having a card closed by creditor on your report does not affect your score.  

In about 10 years the history of that card will fall of your reports and that could affect the AAoA, so that could affect your score, but that won't happen right away, and at that point your other accounts will have aged about 10 years, so hopefully it won't be a huge affect.

[Anonymous]

I agree with Woopah.  Ive had that happen twice in the last two months with  no effect whatsoever on my FICO, but I had a zero balance on the cards that were closed.  I did call and ask for the CL to be transferred to a different card I had with the same creditor though to prevent my util from dropping.  

The closed accounts for an AU will say "Terminated account" but reflect positively.  The close accounts for the account owner will say "Account closed at consumer's request" with no negative impact in and of itself. 

[cobaltnv]

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Binks wrote: 

The closed accounts for an AU will say "Terminated account" but reflect positively.  The close accounts for the account owner will say "Account closed at consumer's request" with no negative impact in and of itself. 

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I believe the OP removed himself as an AU so the TL will not (ok-should not) appear on his credit report any longer. If it still appears, the OP can have it removed as it is not his account. This is especially true if the account has any lates as I believe even a closed account, if it has any baddies, will reflect negatively on your CR. I am sure someone with more knowledge of these things will correct me if I am mistaken. 

[cobaltnv]

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@Anonymous wrote:
 However, after reviewing, the neg. account is listed as Authorized User, I am not responsible for this account. While with the new rules an Authorized User account is not used in the FICO score,

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The "new" FICO scoring model has not yet been implemented (as far as I know). You can search on here for FICO08 to get more info. I believe that the model has been changed and AU will still be counted in the new system; however, there will be some sort of confirmation that the AU is "real". The idea is to remove those who have purchased history by being added as an AU to an account of a stranger for example.