Re: Closed CC acct with balance hurt score??

onquestfor700s · ‎01-02-2015

A little less than a year ago at the time when my CC expired, my old very small Credit Union decided not to renew and close the CC acct. They said because I had moved out of state and my balance was high, so looked risky. Moving forward I've been paying it down but it is still holding a balance. So my question is, does it hurt your credit score to have a closed credit card, with a balance? All payments have always been paid on time, never late. Thank you for your help.

Lanier CU 2,500/ Capital One QS 1,750/ VS 900/ Loft 750/ US Bank Secured 500

cartwrna · ‎01-02-2015

It effects utilization, so depending on how high the balance and the limits on your open cards then yes it could be bad. Since it's closed the limit the card had no longer goes into the equation of balance to limit, just the balance. So say you had 1 other card open with a limit of 2k but was at $0, and this card is closed showing $1500 balance then your utilization would be at 75% as it just has the open cards limit to use for equation.

Don’t take your credit for granted, use it with care! These days, catch me in the bankruptcy forum!?

onquestfor700s · ‎01-02-2015

Thank you, I appreciate the response. It has a $500 balance. It has a very low apr so was trying to pay off other cards first. However, I will just knock it out next month and be done. A lot easier. -Thanks again!

Lanier CU 2,500/ Capital One QS 1,750/ VS 900/ Loft 750/ US Bank Secured 500

Anonymous · ‎01-06-2015

Yes, it hurts you in that it counts against utilization percentage but does not add to your overall credit limit.

MarineVietVet · ‎01-06-2015

@onquestfor700s wrote:
A little less than a year ago at the time when my CC expired, my old very small Credit Union decided not to renew and close the CC acct. They said because I had moved out of state and my balance was high, so looked risky. Moving forward I've been paying it down but it is still holding a balance. So my question is, does it hurt your credit score to have a closed credit card, with a balance? All payments have always been paid on time, never late. Thank you for your help.

It depends.

- If a closed CC account with a balance continues to report the original credit limit, then both the balance and the CL of the closed account will be used in the utilization calculations.

- If a closed CC account is reporting a zero CL, even if there is a balance on the CC, the card will not be included in the calculations.

- If a closed CC account is reporting a non-zero CL but has a zero balance, the card will not be included in the calculations.

- If a closed account reports a CL that is equal to the balance (balance chasing), then this will be included in the calculations. This is the worst-case scenario with regard to utilization.

IamB2 · ‎01-06-2015

@MarineVietVet wrote:
It depends.

- If a closed CC account with a balance continues to report the original credit limit, then both the balance and the CL of the closed account will be used in the utilization calculations.

- If a closed CC account is reporting a zero CL, even if there is a balance on the CC, the card will not be included in the calculations.

- If a closed CC account is reporting a non-zero CL but has a zero balance, the card will not be included in the calculations.

- If a closed account reports a CL that is equal to the balance (balance chasing), then this will be included in the calculations. This is the worst-case scenario with regard to utilization.