Reply
New Member
PianoGuy
Posts: 3
Registered: ‎09-20-2012

Score Dropped Because Closed Account?

I guess I still don't understand the process. Why would my score go down when I didn't do anything different?

I am trying to buy a house, this isn't helping.

 

Got a notice that my score had dropped 7 points, supposedly because of "heavy use of revolving credit".

Except, I didn't have any heavy use and in fact have been continuing to pay down balances.

 

The only thing I did do was close an account I no longer use, one that was in good standing.

 

Here is what FICO shows:

 

ELAN FINANCIAL SERVICES
(XXXXXXXXXXXXxx97)
Account opened: 12/2010
Description:Account closed at consumer s request Closed or Paid Account/Zero Balance Amount in H/C column is credit limit
 Previously reportedNewly reported
Balance:$0 
Past due:$0$0
Status:Pays account as agreedPays account as agreed
Last activity:12/1/201112/1/2011
Description:Credit card Amount in H/C column is credit limit Account closed at consumer s request Closed or Paid Account/Zero Balance Amount in H/C column is credit limit
Moderator
Shogun
Posts: 12,896
Registered: ‎04-15-2011

Re: Score Dropped Because Closed Account?

You decreased your available credit and raised your util.  I take it you have some revolving debt. 


Starting Score: 504

July 2013 score: EQ FICO 819, TU08 778, EX "806 lender pull 07/26/2013
Goal Score: All Scores 760+, Newest goal 800+

Take the myFICO Fitness Challenge

Current scores after adding $81K in CLs and 2 new cars since July 2013
EQ:809 TU 777 EX 790 Now it's just garden time!
Moderator Emeritus
llecs
Posts: 32,880
Registered: ‎08-04-2007

Re: Score Dropped Because Closed Account?

[ Edited ]

SW alerts can be a hit or miss because it grabs the latest score and makes an assumption that the score change was caused by whatever reason they throw out. However, in your case, I think they are spot on. Once you close a CC, then the balance and the CL are forever removed from your CC util. So, if you have any balances reporting whatsoever on any other CCs, then your utilization increased and score decreased when the account reported as closed. If you pay down your other CC balances you'll find that the score will rebound without any memory of the increased util.

 

ETA...slow typer disorder affects 10 million people worldwide. I'm one of those.

Moderator
Shogun
Posts: 12,896
Registered: ‎04-15-2011

Re: Score Dropped Because Closed Account?

I beat llecs to a post!   Now that's cause for a happy dance!!!!  :smileyhappy:


Starting Score: 504

July 2013 score: EQ FICO 819, TU08 778, EX "806 lender pull 07/26/2013
Goal Score: All Scores 760+, Newest goal 800+

Take the myFICO Fitness Challenge

Current scores after adding $81K in CLs and 2 new cars since July 2013
EQ:809 TU 777 EX 790 Now it's just garden time!

myFICO is the consumer division of FICO. Since its introduction 20 years ago, the FICO® Score has become a global standard for measuring credit risk in the banking, mortgage, credit card, auto and retail industries. 90 of the top 100 largest U.S. financial institutions use the FICO Score to make consumer credit decisions.

>> About myFICO
FICO Score - The Score that matters
Fair Isaac Corporation is a BBB Accredited Financial Service in San Rafael, CA
FOLLOW US Social Media Facebook Twitter Pinterest Google+