Simulate for me: Effect of CC Payoffs, some cancels

[BallBounces]

Lets assume one had 5 credit cards, with limits and balances as follows:

Card 1     30,000     30,000
Card 2     20,000     15,000
Card 3     20,000     5,000  
Card 4     10,000     9,000   
Card 5     10,000     1,000   

They also have a typical mortgage(+ 2nd)  and automobile loan, with 2 years remaining in repayment (50% UTIL on the 15,000 Automobile Loan).   What would be the credit score effect if the changes below were made, and nothing else:

Card 1     30,000     X          PIF and Cancelled
Card 2     20,000     0           PIF and remains open
Card 3     20,000     X          PIF and Cancelled   
Card 4     10,000     0           PIF and remains open
Card 5     10,000     1,000   Balance remains the same, remains open

As a follow up,  does the same 'gross score change'  occur regardless of the prior baseline score. 

For example, if one's score was 720 prior to the changes, would it go up to 750, and if one's score was 620, would it similarly rise to 650?

Thanks for your expert opinions.

[BallBounces]

Interesting,

SW EQ says 655  and "not good".  Hope to see it rise.

[Anonymous]

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@VistaV wrote:

Lets assume one had 5 credit cards, with limits and balances as follows:

Card 1 30,000 30,000
Card 2 20,000 15,000
Card 3 20,000 5,000
Card 4 10,000 9,000
Card 5 10,000 1,000

They also have a typical mortgage(+ 2nd) and automobile loan, with 2 years remaining in repayment (50% UTIL on the 15,000 Automobile Loan). What would be the credit score effect if the changes below were made, and nothing else:

Card 1 30,000 X PIF and Cancelled
Card 2 20,000 0 PIF and remains open
Card 3 20,000 X PIF and Cancelled
Card 4 10,000 0 PIF and remains open
Card 5 10,000 1,000 Balance remains the same, remains open

As a follow up, does the same 'gross score change' occur regardless of the prior baseline score.

For example, if one's score was 720 prior to the changes, would it go up to 750, and if one's score was 620, would it similarly rise to 650?

Thanks for your expert opinions.

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Why would you close those accounts after PIF??

You would be better off PIF and leaving them open.

[BallBounces]

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tessarue wrote:

Why would you close those accounts after PIF??

You would be better off PIF and leaving them open.

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Yes, but it is too late.

My thinking is my utilization rate will be just fine even with closing them. 

[Anonymous]

Yep- The maxed bal on 2 cards is killing you along with the 67% UTL.  This could easily be 100 points.

Don't cancel the cards unless they are costing you $ (AF)

If you insist on closing some TL's do it slowly over time-

Card	CL	BAL	Utl
Card 1	30	30	100%
Card 2	20	15	75%
Card 3	20	5	25%
Card 4	10	9	90%
Card 5	10	1	10%
	90	60	67%
Card 2	20	0	0%
Card 4	10	0	0%
Card 5	10	1	10%
	40	1	3%

[Anonymous]

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@VistaV wrote:

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@Anonymous wrote:

Why would you close those accounts after PIF??

You would be better off PIF and leaving them open.

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Yes, but it is too late.

My thinking is my utilization rate will be just fine even with closing them.

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Why is it too late? Have the CCCs closed the accounts, or are you just planning to? Or have you already done it?

And yes, your util will be fine with them closed, but it would be fantastic with them open!!

[BallBounces]

tessarue wrote:

Why is it too late? Have the CCCs closed the accounts, or are you just planning to? Or have you already done it?

And yes, your util will be fine with them closed, but it would be fantastic with them open!!

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I have already paid the two down and requested they be closed.  This was recent, so I am sure I could re-open them, but I am inclined not to for the reasons below.

Essentially, I will have a 3% UTIL with the remaining cards.  I doubt that is much worse than having the 1.5% UTIL if I had kept them  open.  I think My average card age will be ~8 years still as well.

 
off topic?:  Does available credit (specifically too much) ever factor in to a FICO score or lending decision?

[Anonymous]

Avg age won't change if you leave them closed or not- (as it is included all accounts open or closed)

Rarley does "too much Credit" cause an issue-

Having higher CL's and more open accounts makes it easier to:

Keep less than 1/2 of Open accounts with a balance

Use the cards w/o any real worries about UTL-

It's your credit- not ours

Do what is best for you-

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VistaV wrote:

tessarue wrote:

Why is it too late? Have the CCCs closed the accounts, or are you just planning to? Or have you already done it?

And yes, your util will be fine with them closed, but it would be fantastic with them open!!

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I have already paid the two down and requested they be closed.  This was recent, so I am sure I could re-open them, but I am inclined not to for the reasons below.

Essentially, I will have a 3% UTIL with the remaining cards.  I doubt that is much worse than having the 1.5% UTIL if I had kept them  open.  I think My average card age will be ~8 years still as well.

off topic?:  Does available credit (specifically too much) ever factor in to a FICO score or lending decision?

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[BallBounces]

Thanks for the replies.

I just realized that despite some good discussion, my question for opinions on score change was not answered.

I am going to hazard a guess and say 40 point change.