Store Credit- "Closed by Grantor or Creditor" Paid in full.

[Anonymous]

We all know that it is better to keep lines of credit open even with a zero balance than to close them. However, I was looking over my accounts and found two which were closed by the creditor. I contacted one and was told that as I had not used it in over 6 months they do not keep it open. Okay, but what does this do to my score? Anyone?   Anyone?

[haulingthescoreup]

Hi, cardinal, welcome to the forums!

Read fused's (another moderator) "Closing Credit Cards" linked in my siggy.

Immediate possible effect:

If you carry balances/ allow balances to report to the credit bureaus, your FICO scores might drop, because you would have the same amount due, but divided by a smaller figure, due to losing the credit limits on your closed cards.

Long-term effect:

The closed accounts should continue to report for ten years, helping your length of credit history/ average age of accounts. After that, they fall off, and sometimes they stop reporting sooner, and there's not a whole lot you can do about it if they do. At that point, your AAoA will drop, either a little or a lot, depending on how many other accounts your have on your credit reports and how old they are. That can hurt your score, depending on all the other things going on with your reports at that time.

We used to advise using a bank card every six months, but now due to the closing-itis that you experienced, we generally say every 3 months, maybe four, even more often if it's a card from HSBC/ Orchard. A store card should probably be used at least every 6 months to be safe.

If you haven't already, please read Understanding Your FICO ® Score and Credit Scoring 101 (at least the first post.)

These will give you the background knowledge you need to understand what you read here on the forums.