topic Re: New CC rules---if i close acct will it lower my FICO? in Credit Cards

New CC rules---if i close acct will it lower my FICO?

harligrl — Wed, 11 Nov 2009 00:33:33 GMT

With the new laws going into effect in Feb 2010, the media states banks/cc co's are increasing rates now and if you choose to opt out of the increase, your account is closed. So my question is if the cc co. closes my acct i can see where that would reflect negatively on my FICO score because the cc co. is closing the acct., BUT if i close my cc acct., does it still report negatively? Anyhelp is appreciated.

Re: New CC rules---if i close acct will it lower my FICO?

Anonymous — Thu, 12 Nov 2009 04:14:12 GMT

If you carry balances on any of your cards closing an account may lower your FICO scores.

Message Edited by creditwherecreditisdue on 11-11-2009 11:14 PM

Re: New CC rules---if i close acct will it lower my FICO?

haulingthescoreup — Wed, 11 Nov 2009 18:35:48 GMT

harligrl wrote:
With the new laws going into effect in Feb 2010, the media states banks/cc co's are increasing rates now and if you choose to opt out of the increase, your account is closed. So my question is if the cc co. closes my acct i can see where that would reflect negatively on my FICO score because the cc co. is closing the acct., BUT if i close my cc acct., does it still report negatively? Anyhelp is appreciated.

(emphasis mine)

Hi, welcome to the forums!

The designation of "closed by creditor" has no effect on your scores. It's the same as if it says "closed by consumer."

Where it might affect your scores is if you carry balances, or if you allow balances to report and then pay them in full. By having an account closed (by any means), your total credit limit is reduced by the amount of the credit limit on that account. This will make the amount of your available revolving credit that you've used (= revolving utilization or "util") increase. If it increases enough, your FICO scores might drop.

If you haven't already, please read Understanding Your FICO ® Score and Credit Scoring 101 (at least the first post.)

These will give you the background knowledge you need to understand what you read here on the forums. You might also want to read fused's "Closing Credit Cards" (linked in my siggy below) to learn the ins and outs of closing accounts.

Re: New CC rules---if i close acct will it lower my FICO?

dallasjetfan — Wed, 11 Nov 2009 21:22:53 GMT

I have closed 8 accounts in the last year and it hasn't affected my credit score negatively at all. It helped because I paid them off and hurt because I lost the utilization. All in all, it was a push. I don't really care at this point. I won't use another card that rate jacks me after perfect payment history. I will just pay cash for everything. I don't need a high credit score because I won't borrow money unless it is for a mortgage and my credit score won't matter at that point since I will have 30% down. Screw the credit card companies!! I hope they all go bankrupt!!

Re: New CC rules---if i close acct will it lower my FICO?

harligrl — Thu, 12 Nov 2009 02:49:08 GMT

thank you so much for the helpful advice. I will take a look at the links you provided. Much thanks again!