EQ Score drop after account closure

[OmarGB9]

Soooo I recently closed out a Dillard's store card I had that I no longer used, and obviously it had a zero balance prior to account closure, but now that my reports have updated to show it has been closed, my EQ seems to have taken an 8 point hit. Nothing major and I'm sure I'll get the points back soon enough, but I'm just wondering if someone can shed some light as to why the point hit. I know it certainly wasn't cause of a UTIL change since it had a toy limit of $300. Still have over $18k in credit and overall UTIL at around 22/23%. Other bureaus seem unfazed, and nothing else has changed on my EQ report that I can see. So fellow MyFICOers, what do you think?

[CH-7-Mission-Accomplished]

God and FICO work in mysterious ways.

[OmarGB9]

Lol. seriously nobody has any guesses? 😕

[Anonymous]

My guess is that you have an "alert" based credit monitoring service -- like perhaps the one that myFICO provides.  A number of things can cause your account to go up or down without sending you an alert.  But when certain kind of events happen, the service notifies you of that event with an "alert" and at the time sends you a credit score.  The score is being sent almost as though it were an afterthought -- it is quite possible that your score had changed for other (nonalertable) reasons and you are only finding out about it because of the alertable event happening (e.g. closing a CC, whatever).  It's further complicated by the fact that what might be alertable at one CRA isn't necessarily alertable at another -- I think that Equifax may have more alerts than the other two bureaus.

Because of all this, some people find that alert based services are less illuminating and more confusing than they are worth.  (It's a matter of personal preference.)  Such people may find that they like a system where they get to control when their scores are pulled.

All of which is to say that it may be premature to say that you have an EQ score drop CAUSED by the store card being closed.  Your EQ score may have dropped before that.  Your other two scores may have dropped but you haven't been told yet.

[Anonymous]

Although my money is on the explanation I just gave, it's possible that a score drop could be partly attributed to a zero-balance card closing (even one with a tiny CL).

One of the many factors that belongs to the Amounts Owed category is the number of open cards you have reporting with a $0 balance.  When your card closed, you lost one of those $0 open cards.  Now a greater proportion of your open cards consists of cards with positive balances. 

For what it is worth, there may be many good reasons to be gradually divesting yourself of store cards you do not use.  For example, the insurance industry pulls your credit reports and gives you a significant spank (in their own risk assessments) for having store cards and many other kinds of accounts that FICO may not find a problem.  So I think you did the right thing by cancelling it.

[Anonymous]

Was it the only open store card? If it was, score drop may have to do with credit mix; type of credit available to you. Just a guess.

[Thomas_Thumb]

I think # of open CC accounts reporting a balance can affect score. Some think % of open accounts may be a factor in the calculation.

If so, your % would change by dropping out a card - if for example you had 5 cards and 2 of 5 reported before and now it is 2 of 4 ...?

[OmarGB9]

Ah. I hadn't even thought of the number of cards reporting zero balance versus reporting a balance thing. That's probably what it is. Oh well. I plan on paying down another of my cards to zero here soon, so I should get the points back. But yes, I know how sometimes a trigger isn't necessarily correlated to a score change, although in this case I think it was, since like I said nothing else changed on my report (not even AAoA I'm pretty sure since it's the middle of the month). Thanks for the insight everyone!

[elim]

RFM  (random fico madness)

[CreditDunce]

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@Anonymous wrote:
Was it the only open store card? If it was, score drop may have to do with credit mix; type of credit available to you. Just a guess.

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True for the quirky NextGen Fico score.  Not true for any other FICO score.