Score drop for Paid closed vs. just closed?

[Sistalimor]

I had closed a Chase credit card about six months ago and it still had a balance. I paid it off in December 2011 but still had $2 residual interest report. Question..The card was already closed and showing closed. With this the score was 656...as soon as it reported Paid closed it dropped 3 points to 653. Why and what is the difference?

	Previously reported	Newly reported
Balance:	$2	$0
Past due:	$0	$0
Status:	Pays account as agreed	Pays account as agreed
Last activity:	12/1/2011	1/1/2012
Description:	Account closed at consumer s request Credit card Amount in H/C column is credit limit	Account closed at consumer s request Closed or Paid Account/Zero Balance Credit card Amount in H/C column is credit limit

Thanks,

Sistalimor

[pizzadude]

It could have been to having a slightly lower CC utilization, without the $2 balance and the corresponding credit limit included in your %util.   It could have also been due to something else on your reports, completely unrelated.   3 points is really an anomoly, and I wouldn't worry about it.

The comments in the Description field don't mean anything towards your FICO score.

[Sistalimor]

Well there was nothing else that changed for sure. I monitor here and through USAA. Weird I say. The scorewatch alert came through about the account change and at the same time the score drop alert came as well. I know it's only three points but it just seemed strange that the two coincided. I just can't fathom why 3 points for that alert considering nothing but an account description and a $2 difference! Thanks though!

Sistalimor

[pizzadude]

Yeah, the comments don't play any role in FICO scoring, so very likely it was the balances and credit limits reported that made the difference.

[RobertEG]

I think pizzadude hit the nail on the head.   Things did change....

Once paid, the account no longer scored in % util, so its CL was lost in the calculation of overall % util.  Additionally, with one less revolving card being included in revolving with balance, the scoring of % revolv with balance also shifted.

[Sistalimor]

The only thing though I don't get is that the account had already been closed long before this. I did the bad thing and closed it with a balance then paid it off later. Since it was already closed, according to my reports, it was not counting towards my credit line but of course was affecting my overall utilization. Seems like it should have actually instead went up three points since it was no longer included in calculating the overall utilization. Thanks for thinking about this though.

Sistalimor

[Anonymous]

It was closed with a balance and if the limit was still reporting it was included in util. When you paid off the balance that's when the account stopped being included in your util. 

[rckstrscott]

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@Anonymous wrote:

It was closed with a balance and if the limit was still reporting it was included in util. When you paid off the balance that's when the account stopped being included in your util. 

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Exactly -- its unfortunate, but that is what happened. Just a quirk of the scoring model.

-scott

[Sistalimor]

I hear that! Sounds to me like the scoring model algorithm is due for and update! Thanks all!