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Closed accounts and how they effect scoring

I have the following account reporting. I have read mixed discussions regarding clsoed accounts with balances and was wondering specifically how this account may be affecting my score. This is the only acconut with a balance. Everything else has been paid off, my util is basically nothing in case anyone was wondering. SInce this account has been closed I always pay everything else in full monthly and use the extra leftover money I could be using to pay this off, to instead double my car payment since that loan is fairly new (less than a year) and still has 45k showing. Damn Lexus! Acct Status: Closed Date Open: 5/1/2007 Balance: $385.00 High Balance: $1,420.00 Limit: $750.00 Past Due: $0.00 Payment Status: Current Pays account as agreed
Try not to become a man of success but rather to become a man of value
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Re: Closed accounts and how they effect scoring

 


ngerasimatos wrote:
I have the following account reporting. I have read mixed discussions regarding clsoed accounts with balances and was wondering specifically how this account may be affecting my score. This is the only acconut with a balance. Everything else has been paid off, my util is basically nothing in case anyone was wondering. SInce this account has been closed I always pay everything else in full monthly and use the extra leftover money I could be using to pay this off, to instead double my car payment since that loan is fairly new (less than a year) and still has 45k showing. Damn Lexus! Acct Status: Closed Date Open: 5/1/2007 Balance: $385.00 High Balance: $1,420.00 Limit: $750.00 Past Due: $0.00 Payment Status: Current Pays account as agreed

 

Just continue paying down the 385 balance in a timely fashion, if it is at a higher interest rate pay it off before other debt.

 

FICOS:
06/13 EX 765 (PSECU) EQ 771 (DCU) TU 779 (Barclays)
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Re: Closed accounts and how they effect scoring

Since this closed account has both a balance and a credit limiting reporting, then it is included in your calculation of utilization of revolving credit.  The individual utilization on this card is slightly more than 50%.

 

As soon as your balance goes to zero, it will be removed from your utilization calculation.

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Re: Closed accounts and how they effect scoring

This company actually had recently sent me a letter offering to accept 75% of the total amount due in exchange for zeroing out the account, I didnt want to accept that offer as I thought they may then report something funky to the bureaus, like a "settled for less than owed" or something weird. Credit companies are shady. I dont trust them. In any case, Ill pay it off in full this month before the statement date so I can get it reporting as PIF.

Try not to become a man of success but rather to become a man of value
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Re: Closed accounts and how they effect scoring


Lel wrote:

Since this closed account has both a balance and a credit limiting reporting, then it is included in your calculation of utilization of revolving credit.  The individual utilization on this card is slightly more than 50%.

 

As soon as your balance goes to zero, it will be removed from your utilization calculation.


 

So even though this has a 50% util, and my other cards have a 0% util, they are not tabulated as a whole? Total credit in use / total credit lines?

Try not to become a man of success but rather to become a man of value
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Re: Closed accounts and how they effect scoring

[ Edited ]

Yeah, they probably would have reported the account as settled, which would drop your scores.  Not worth the $100 in savings.  Strange that they'd even make the offer to you at all, if you've been paying it as agreed all this time.

 

ETA: the FICO score looks at overall utilization as well as individual account utilization.  In my experience, the individual utilization has less of an impact if your overall utilization is still pretty good.  For example, I have a rewards CC that I occasionally push to around 40-50% of its CL.  My score might drop by a few points when this occurs, but because my overall util stays below 9%, the negative effect is blunted.

 

So your closed account at 50% util might be having a effect on your scores, but if your situation is like mine, the effect is probably quite minimal.

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Re: Closed accounts and how they effect scoring

I am pretty sure its becuase I have been paying only small amounts monthly for a long time now, tending to my open accounts first and just paying whatever is leftover to this account. I tend to use my credit cards for the points and immediately (within a few days) pay off the balances in full. This account was a POS account with Salute, and they had tried to charge me all types of outrageous annual fees and monthly service charges. When I saw the amounts of the charges starting to build, and when my card got stolen when on vacation (and they did NOT clear the charge that was fraud and had ME pay it!!) I closed the account out of pure anger and frustration. I will never forget my last few words to the CSR. Though, out of respect to other member here I will not post them.

Try not to become a man of success but rather to become a man of value
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Re: Closed accounts and how they effect scoring

[ Edited ]

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FICOS:
06/13 EX 765 (PSECU) EQ 771 (DCU) TU 779 (Barclays)
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