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Here's a question I can't seem to get a good answer on!... I have a credit card that shows several 90 to 120 day lates from six to seven years ago. It is technically closed, but is still reporting as open and being paid on time ever since the late payment were back to on-time (nearly 7 years ago). It has a very high limit, around 25% of my total credit. Basically, I have the option of getting it deleted from my reports because of the 7-year late removal law. BUT, because it makes up such a big percentage of my overall credit, I am wondering what I should do? I am at 50% utilization now, and will jump to nearly 75% if I get it deleted, but many have told me that an account showing lates of 90 to 120 days is hurting my score too much. Any ideas??
I would delete the lates and work on paying down the utilization. I would rather have a clean report.
Do you think that deleting it entirely would make my score go down due to the higher utilization, or is teh presence of those lates really such a big negative for the score?
Are you in a hurry? If not, after 7 years, the lates will scroll off. If the account truly is closed, there's no guarantee that it will continue to exist beyond 10 years, if even that long.
If I'm understanding your situation correctly, you can't remove the account (and the lates along with it) anyway.
Best case: within a year, the lates scroll off and you have an old open account which benefits you with improved utilization and age.
EQ | 841 | 5 INQ (Auto, CC, HELOC, 2 mort) | 7y2m |
EX | 812 | 5 INQ (2 CC, 2 mort, HELoan) | 6y11m |
TU | 829 | 4 INQ (3 CC, 1 mort) | 6y6m |
5/24 | 3/12 | AoYA 0m | AoOA 23y6m | ~3% |
The key to your scenario is that the account is now in a non-delinquency status.
When an account has a current status that is not one of delinquency and the reported payment history lates reach 7 years from the intial delinquency in the chain of delinquency, the exclusion of the payment history lates removes all reference to prior delinquency, with the result being that the CRA does not exclude the entire account. It will remain after exclusion of the prior lates as an account that no longer shows any delinquencies, and the entire account will not be deleted by the CRA until it reaches its normal housecleaning removal at approx ten years from date closed.
If the account were still delinquent, then the CRA would remove the entire account due to the necessity to exclude all reference to the delinquency once it reaches 7 years from date of occurence. FCRA 605(a)(5).
An account must have a current status, and the current status of delinquency cannot simply be excluded, so CRA policy is to exclude the entire account.
To be clear, I am asking if you think it is best to delete an account that shows as open and paying on time, but has some 90 to 120 days late on the account that are 6.5 to 7 years old - OR - Is it better to keep this account on the report, even though it shows some very late payments? Basically, it is a Capital One account that is closed, BUT they are reporting it as open. I know, it's weird. But, that is what it is. I'm asking for advice because I would like to get my score up around 725 to 750 within a few months. It is now 705. Everyone seems to say that having 90 to 120 days late on any account, even if nearly 7 years old is SO BAD that if I have an opportunity to have the entire account removed, then this is best. (i.e. the negative impact on the score due to the lates is bigger than the positive impact on the score based on the high capacity)
For clarification, when you say account is technically closed but open. Did the credit grantor close the account, 0 credit limit, but you still have a balance reporting and making those payments till paid off?
If so, your utilization on that one card will always be 100% even if your balance is $10.00 with 0 credit limit.
The account was closed, but they agreed to report it as open and still with a $19K credit available. It really makes no sense I know, but that is what it is. There has not been a balance for several years, but it just keeps reporting OK every month. Capital One said they could request it be removed from my report based on the 7 years since first delinquency date. I'm trying to figure out if that would be a good move.
@glaucuswrote:The account was closed, but they agreed to report it as open and still with a $19K credit available. It really makes no sense I know, but that is what it is. There has not been a balance for several years, but it just keeps reporting OK every month. Capital One said they could request it be removed from my report based on the 7 years since first delinquency date. I'm trying to figure out if that would be a good move.
I don't know why Cap One would agree to that and why it would report as open if its closed. That's just wierd.
You said the lates are 6- 7 years old. You could make a goodwill request to Capital On and see if they will remove the lates or just let them fall off . If in fact this closed account is reporting as open and helping your util then I would't do anything that would result in less available credit. In a few months the lates are gone either way, but if the account goes away so does the good history that is reporting after that as well as your util increasing.