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Moderator Emeritus
Brammy
Posts: 5,436
Registered: ‎03-10-2007

Closing cards

I applied for a card and really didn't get what I wanted out of it so recently applied for a new card with a much higher limit as well as cash rewards.  My question is what effect will closing a new account have if your utililzation remains at about 15%?  I got a ding on my report for too much avail credit suggesting I close an account or lower limits. 
Administrator Emeritus
Barry
Posts: 4,386
Registered: ‎03-01-2007

My question is what effect will closing a new account hav...

My question is what effect will closing a new account have if your utililzation remains at about 15%?  I got a ding on my report for too much avail credit suggesting I close an account or lower limits. 
 
As you probably know, Brammy, the main reason why you don't want to close an account is because by closing it you reduce your available credit, which can then increase your utilization percentage.  So, if you're saying that your revolving utilization is about 15% regardless of whether this new account open or closed, then there shouldn't be any negative impact to your score from closing it.  Are you closing the new account to avoid further fees?
 
And I'm curious about your comment about getting dinged for too much available credit.  Is that what one of the negative reason codes you received with your score said?
Barry Paperno, assisted by an invaluable team of dedicated volunteer moderators, launched, grew and guided the myFICO Forums from 2007 to 2012.
Moderator Emeritus
Brammy
Posts: 5,436
Registered: ‎03-10-2007

Believe it or not the message I got under negative reason...

[ Edited ]
Believe it or not the message I got under negative reasons was 'Too much avail credit will make lenders nervous, consider closing some accounts or asking that your limits be lowered'
 
Utilization would be at 15% if I closed it since it is the lowest limit major I have right now I'm somewhere around 12.  I called to close and they talked me out of it by doubleing the limit.  Just what I needed:smileytongue:
 
Now Barry one to those other questions I posed and I have another doozy brewing.  I need FICO Guru help:smileyvery-happy:


Message Edited by Brammy on 03-15-2007 05:38 PM
Administrator Emeritus
Barry
Posts: 4,386
Registered: ‎03-01-2007

Believe it or not the message I got under negative reason...

Believe it or not the message I got under negative reasons was 'Too much avail credit will make lenders nervous, consider closing some accounts or asking that your limits be lowered'
 
That doesn't sound like a FICO scoring negative reason since the scoring formula doesn't consider 'too much available credit' to be an indication of increased risk.  In fact, there is no such thing as too much available credit in the eyes of the FICO formula.  (Although that doesn't mean it's a good idea to open a bunch of new accounts to increase this availability.)  I take it this was a non-FICO credit score you received this negative reason on?
Barry Paperno, assisted by an invaluable team of dedicated volunteer moderators, launched, grew and guided the myFICO Forums from 2007 to 2012.
Moderator Emeritus
Brammy
Posts: 5,436
Registered: ‎03-10-2007

Yes this is a FICO model supposedly tied to scorewatch....

Yes this is a FICO model supposedly tied to scorewatch.   It says too many cards with a balance since I rotate which cards I use, a few bucks reporting on each card this mo. (50 here, 60 there)  Then goes on to give that line about lowering limits or closing cards due to too much avail credit. 
Regular Contributor
okrogius
Posts: 169
Registered: ‎03-16-2007

Pay the cards those few bucks before they report (typical...

Pay the cards those few bucks before they report (typically the end of statement balance, although easy enough to figure out). You'll still keep the cards active but you won't have the too many cards with a balance issue.

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