Close Maxed Out Cards

[Anonymous]

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@sarge12 wrote:

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@marty56 wrote:

Unless the card carries monthly fees, there is never any good reason to close a credit card.  FICO has no concept of prime/subprime cards and an open CC will remain on your CR as long as it is open which helps your FICO score any anyone who might do a review of your CR including the company that owns it.

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I disagree with this slighty, if the OP is nearly certain the creditor is going to close the account, it would be better if OP closes it. Then it would show as an account that was closed at the consumers request on the credit report. This is better than showing as closed by creditor on the report.

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If the OP closes the account and continues to be late it will still report 120 days late. Open or closed.

[sarge12]

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@Anonymous wrote:

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@sarge12 wrote:

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@marty56 wrote:

Unless the card carries monthly fees, there is never any good reason to close a credit card.  FICO has no concept of prime/subprime cards and an open CC will remain on your CR as long as it is open which helps your FICO score any anyone who might do a review of your CR including the company that owns it.

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I disagree with this slighty, if the OP is nearly certain the creditor is going to close the account, it would be better if OP closes it. Then it would show as an account that was closed at the consumers request on the credit report. This is better than showing as closed by creditor on the report.

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If the OP closes the account and continues to be late it will still report 120 days late. Open or closed.

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True....but in the remarks section of account it will say account closed at consumer request....not account closed by creditor due to delinquincy, that would be the only difference.

[sarge12]

1 – 29 days: At this point, you will have missed only one payment. If you can make the required minimum payment before the 30th day, you will avoid credit score damage, as credit card companies do not report this level of delinquency to the credit bureaus.

• 30 – 59 days: In this case, you’re behind on two payments – one of which is at least 30 days late. Credit card companies will report delinquency, but it won’t hurt your credit too badly.

• 60 – 89 days: You’re now behind on three payments. One is at least 60 days late, another is at least 30 days late, and the last one is at least one day late. At this point, your credit score will be hit hard. If you previously always paid your bill on time, your score could drop as much as 100 – 125 points.

• 90 – 119 days: You’re now behind on four payments – the first being at least 90 days late, the second at least 60 days late, the third at least 30 days late, and the fourth at least one day late. Depending on the credit card company, your account could be turned over to collections at this point. Either way, your credit score will continue to drop.

• 120-179 days: At this point, you’re late on at least five different payments. Collections calls will significantly increase, and the impact on your credit score will be significant.

• 180 days:  When your credit card account becomes 180 days delinquent the credit card company is required to declare your account as being charged-off.  Charging-off on an account causes the biggest blow to your credit score.  Aside from bankruptcy and foreclosure, a charge-off is the worst thing one can do to their credit worthiness.

[sarge12]

The previous post was to show the effects of late payments. I do agree it is never a good idea to close a credit card that does not have an annual fee, unless you have good reason to believe that the creditor may be about to close it due to delinquincy or lack of use (this can be avoided by using the card). If however you can not ever make payments, or for some reason refuse to use a card, and the creditor will eventually close it, you are always better off to close it yourself. The amount of delinquincy the creditors will allow prior to closure varies...but as the previous posting states, they must charge it off by 180 days late. Closing will not affect lates reporting at all, nor will it eliminate any debt. It will only change the remarks for reason of account closure, closed by creditor due to delinquincy looks worse than closed at consumer request on a credit report...and yes, creditors do look at remarks on closed accounts.