04-13-2013 10:00 PM - edited 04-13-2013 10:00 PM
I have an inactive credit card that was 60days late payment about 6yrs ago(Aug 2006) , its the only -ve on my a/c. I plan on getting myself preapproved for a Mortgage loan, so was speculating on closing this a/c .However my score is barely above 780 so worried if that will pull down my score. The credit card limit on that a/c is barely $500/- Just wanted to know by how many points will my points drop? Or do you suggest I just leave it as is.
04-14-2013 09:52 AM
I want to apply for a preapproval in this coming week. Although my credir score seems good, I was wondering if Lenders will have an issue with that 1 -ve on my account when sanctioning me a mortgage, also will they be conservative in approving my loan amount?
04-14-2013 10:13 AM
I would leave it. There are a lot of assumptions here.
Assuming they automatically didn't close it by now, closing it wouldn't make the account, payment history, or status go away. It'll still remain.
Assuming that the card is still reporting as open, has a $0 balance, and is still updating monthly, then closing mean FICO will still score the past history, impact to your mix of credit, etc.
Assuming the card had updated within the past few months and has a $0 balance, the only impact by closing it would be a potential increase in your overall CC util. FICO will ignore the balance and CL for util purposes once closed, so if you are carrying any balances on your other CCs, then that would increase your overall util and potentially drop your FICO.
Assuming it hasn't updated in a very long time, then there shouldn't be any negative impact on FICO if closed. There wouldn't be any positive impact by doing so.
I'll take a different tact here....I'd argue that if you initiate a request to close the CC there's potentially a moderate risk of the creditor initiating an internal dispute and deleting the entire account off your CR. Assuming you have zero lates or negative accounts reporting aside from this, any gain would be very small, if at all. A 6-yo 60-day late is relatively minor in damage by this point. I've had some 7-yo 60 days removed on a clean report and had no positive FICO impact. YMMV on your overall credit. If they did delete it can have a negative impact on your FICO if this CC were your oldest revolving or among your oldest accounts.
All of the above is on a FICO standpoint. Per FICO, I wouldn't touch it.
Per a lender review, they won't care about a 60-day late from 6 years ago. There are plenty of lenders out there who wouldn't even look twice.
04-14-2013 08:03 PM
Most bankers will not worry or be concerned about a late payment with a six year bday. Ditto, to get rid of your longest positive trade could hurt you.
Forums posts are not provided or commissioned by FICO. Forums posts have not been reviewed, approved or otherwise endorsed by FICO. It is not FICO's responsibility to ensure all posts and/or questions are answered.Advertiser Disclosure: The listings that appear on myFICO are from companies from which myFICO receives compensation, which may impact how and where products appear on myFICO (including, for example, the order in which they appear). myFICO does not review or include all companies or all available products.
IMPORTANT INFORMATION: All FICO® Score products made available on myFICO.com include a FICO® Score 8, along with additional FICO® Score versions. Your lender or insurer may use a different FICO® Score than the versions you receive from myFICO, or another type of credit score altogether. Learn more
FICO, myFICO, Score Watch, The score lenders use, and The Score That Matters are trademarks or registered trademarks of Fair Isaac Corporation. Equifax Credit Report is a trademark of Equifax, Inc. and its affiliated companies. Many factors affect your FICO Score and the interest rates you may receive. Fair Isaac is not a credit repair organization as defined under federal or state law, including the Credit Repair Organizations Act. Fair Isaac does not provide "credit repair" services or advice or assistance regarding "rebuilding" or "improving" your credit record, credit history or credit rating. FTC's website on credit.