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RogerAustin
Posts: 2
Registered: ‎04-17-2007
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How does a credit card account that is closed due to "underutilization" help/hurt?

one of my credit cards recently sent me a letter saying that they had elected to close my account simply because I had not used it enough. Does this help my FICO score or hurt my FICO score? It didn't seem that it has hurt so far as I haven't gotten any myFICO alerts that my score has dropped, but then again, it's only been 3 weeks or so since they sent me the letter. Also, I applied for 3 credit cards the week before they sent me the letter (because obviously I wanted a better interest rate). any ideas?
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Brammy
Posts: 5,436
Registered: ‎03-10-2007
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Re: How does a credit card account that is closed due to "underutilization" help/hurt?



RogerAustin wrote:
one of my credit cards recently sent me a letter saying that they had elected to close my account simply because I had not used it enough. Does this help my FICO score or hurt my FICO score? It didn't seem that it has hurt so far as I haven't gotten any myFICO alerts that my score has dropped, but then again, it's only been 3 weeks or so since they sent me the letter. Also, I applied for 3 credit cards the week before they sent me the letter (because obviously I wanted a better interest rate). any ideas?

 
I'll start this y asking my own question.  Which bank did this?
 
As far as hurting your creditscore, it will report closed by lender instead of consumer which is not good but I would negotiate that they add closed for inactivity.  If the avail credit would cause you utilization to go above 10 - 30% if it currently below these levels, yes, it can hurt your score.

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RogerAustin
Posts: 2
Registered: ‎04-17-2007
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Re: How does a credit card account that is closed due to "underutilization" help/hurt?

Aspire Card did this.
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Brammy
Posts: 5,436
Registered: ‎03-10-2007
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Re: How does a credit card account that is closed due to "underutilization" help/hurt?



RogerAustin wrote:
Aspire Card did this.

That explains it Aspire is one of the worst s/p cards issuers out there.  They weren't making enough money off of you.  I odn't think it would hurt unless they jus indicate closed by lender with no further notations.  Do you have other cards?  Having that card open was prbably doing more damage then having it closed regardless of the reason


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