Re: Anyone know any cards or things to due for someone who consolidat
ed there credit?
09-30-2012 09:46 AM
Closed CCs w/ a balance still factor into CC util, as do open ones. Unfortunately, many consolidation companies will ask you to close the cards when entering their program and/or when you accept their check. Once the balance goes to $0, then they are forever removed from CC util. So, if closed and at $0, I can see a scenario where a FICO score can drop, especially if they have any other account(s) that still report a high balance and are hurting CC util. It may be out of his/her control anyway, but it's often a requirement they are closed.
If the accounts were late which led to the decision to consolidate, then that too can have an adverse result when the accounts show lates and/or derog comments.
Not too much they can do other than maybe ask 2-3 creditors if they can reopen the accounts. If not, I'd tell them to open a secured card or two. It also sounds like there are other things going on within the reports. 200 seems too high for changes in util alone. I suspect there are some lates factored in there somewhere, and/or they are comparing two different scoring systems (e.g. a FICO with a FAKO).