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Utilization factoring?

New Contributor

Utilization factoring?

I currently have four credit cards in my name.  However, one of them is closed.  It had a $1,000 limit and I have about $185 left on the balance.  I have one open card that is currently over limit (2900 limit, but owe 3200) - ugh had to use it for a $700 a/c repair which threw it over!  The other two open cards are close to their limits.  I'm wondering, when total utilization is calculated, does the limit on the CLOSED account factor into anything?  Or just the balance LEFT on the closed account along with the other balances  and their limits? 

 

Thanks for any assistance!

17 REPLIES
Established Contributor

Re: Utilization factoring?

I believe only the balance would factor into the utilization, not the limit ($185, not $1000)


tisch0791 wrote:

I currently have four credit cards in my name.  However, one of them is closed.  It had a $1,000 limit and I have about $185 left on the balance.  I have one open card that is currently over limit (2900 limit, but owe 3200) - ugh had to use it for a $700 a/c repair which threw it over!  The other two open cards are close to their limits.  I'm wondering, when total utilization is calculated, does the limit on the CLOSED account factor into anything?  Or just the balance LEFT on the closed account along with the other balances  and their limits? 

 

Thanks for any assistance!


 

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Established Contributor

A closed card no longer counts toward your available cred...

A closed card no longer counts toward your available credit, but the balance does factor into your overall debt.

 

Using the two cards you mentioned, you currently owe $3,385 on an available $2900.  That's 116% utilization.

 

I understand that you have other cards that may factor into your true utilization percentage, but the above is an example.

Established Contributor

Re: A closed card no longer counts toward your available cred...

+1

NFCU CashRewards $13.5k | AMEX BCE $15k | Lowes $17k | Sportsmanss guide $7.6k | Chase Freedom $1k | Discover IT $4.4k |
Walmart $8k | Gordman's $2950
New Contributor

Re: A closed card no longer counts toward your available cred...

So now I'm wondering, if I paid the balance off on the closed card and requested that they re-open it (I'm the one that closed it initially), could that help my credit as it would reduce my utilization percentage?  The account has been closed for a long time - would they need to run a hard pull on my credit to see if they would re-open it? 

 

Also, if an AU requests to be removed from a primary's account, does any history on that account disappear from the AU's credit report?

Established Contributor

Re: A closed card no longer counts toward your available cred...

If the card has been closed that long, they probably won't reopen it.  You'd have to reapply, in which case you'd have new account history.  Unless it's Amex, that doesn't help you.  You definitely should pay it off, though.

 

If an AU is removed, I do believe they lose the history.  We removed me from one of my wife's cards and it no longer appears on my reports.

New Contributor

Re: A closed card no longer counts toward your available cred...

Hmmmm maybe that AU removal would work to my advantage - I am an AU on my spouse's account (in addition to the four that are mine as primary).  His account is closed (5250 limit but still owe 2450 on the card).  So that stinker is on my report too.  At least if I get that removed that additional debt won't be factored on me.  Hoping that it will make my credit score jump too!  Looking to buy a car at the end of the year!

Moderator

Re: A closed card no longer counts toward your available cred...

IMO, it would be wise to remove the AU account from your report and pay off the closed account to a zero balance. Remember the metric measures how many accounts are at zero too.

 

Naturally, if you could get your utility down your score will take a jump. IME utility is a pretty big factor and you see it all over this board. When I paid off everything down to 4% my score jumped on TU from 705 to 719 this month (myFICO) and my utility before the payoff was right around 12% IIRC (could have been 14%). But my point is, when you get over 50% usage individually and collectively, your score really takes a hit.

Moderator Emeritus

Re: A closed card no longer counts toward your available cred...

OP, per FICO scoring, a closed CC with a balance and a reported CL are fully factored into utilization, not just the balance. It'll remain factored in for as long as the balance reports anything other than $0. Once it is paid off, then FICO will ignore both the balance and CL forever. In other words, that closed TL helps you quite a bit now. However, focus on paying down balances as you can't keep a balance on it forever.

Valued Contributor

Re: A closed card no longer counts toward your available cred...

I was wondering in which ways a card account can be closed when the balance hasn't yet been fully paid down?

 

Also, it may be worth considering that not all cards, such as charge and NPSL, figure in utilization.