PLEASE HELP ME!!

[Anonymous]

I recently graduated from college and relocated to start my new job. I knew that I would not be able to pay my bills this month (June) so I postponed all of my monthly payments. One of my cc companies advised that I enter into a program where I could close my account for 2 months so that I would have any late fees. I thought this was the best option so I closed it only to find that it would drop my score 98 POINTS!!! 

 On June 24, 2009 my FICO score was 702. Today June 29, 2009 my score is a 604!!! I am completely devestated. I called the cc company to tell them that I feel completely mislead. I would have opted for a late fee if I had known my credit score would be affected. They agreed to re-open the account since the rep. did not inform me of the affect closing the account would have on my credit score. They said the credit bureau should be informed of this within the next week.

My questions are:

1. I thought 50% of your credit score was payment history.I have never had any late payments, so why did the score drop by so much?

2. Will my score go back up once they re-open the account?

3. How long will it take to go back up?

[llecs]

That's a big drop...

On the surface, closing an active CC would impact you in the short-term in one of two ways: 1) increased utilization if the CL is no longer being factored in (assuming balances on other CCs) and 2) loss in the mix of credit (assuming you don't have at least a couple other CCs outside of the one). Long-term, once it is deleted off your CR 10 yrs from now if in good standing, you'd lose the history and the avg. age.

I bet something else happened, though. Some CCCs, under a debt settlement, restructuring, or deferment plan, will ding your score for a late. Go over your accounts and look to see if a new late was added to any of your accounts. A new 30-day late, with a clean history, can drop your score by that much.

[RobertEG]

Charging you with late fees, and their reporting of delinquencies to a CR, are unrelated.

I have never heard of "closing an account for two months."

They either close it in reporting to a CRA, or it remains open.There is no CRA reporting option for a temp. closing.

What they apparently meant was only that they were waiving late charges for two months.

Did they actually close the account, with concurrent reported delinquences?

I doubt that their "magnanimous offer" to re-open the account will lead to deletion of any derogs they have previously reported.

You need to contact them, and make sure that all delinquencies they have reported (30/60 lates) are deleted from your credit file.