topic Re: Closing a High Limit Credit Card in Credit Cards

Closing a High Limit Credit Card

Anonymous — Sat, 19 Apr 2014 13:48:14 GMT

Re: Closing a High Limit Credit Card

Anonymous — Fri, 19 Oct 2012 02:08:32 GMT

I would say keep it for you AAOA. Dont be afraid to keep a little balance on it. Even 1 or 2% on it. Pay it off after your statement comes out to avoid big interest charges.

Re: Closing a High Limit Credit Card

Anonymous — Fri, 19 Oct 2012 02:23:54 GMT

I am just very confused why my dico score can decrease over a 3 month period when I paid all bills on time including a mortgage and car loan and I have a 0% credot card UTIL ratio. Grrrrr!!

Re: Closing a High Limit Credit Card

Anonymous — Fri, 19 Oct 2012 03:27:24 GMT

@Anonymous wrote:
I am just very confused why my dico score can decrease over a 3 month period when I paid all bills on time including a mortgage and car loan and I have a 0% credot card UTIL ratio. Grrrrr!!

0% utilzation is weighing your score down. Let a 1-9% balance report on your highest limit cc and your score will jump

Re: Closing a High Limit Credit Card

Anonymous — Fri, 19 Oct 2012 03:28:43 GMT

Personally, I would suggest to NOT close that card! Keep your AAoA and that card will help build your others (if you need to, that is ). Try letting acouple balances report each month; nothing major, but just to show activity.

Re: Closing a High Limit Credit Card

KIPPIE12 — Fri, 19 Oct 2012 03:59:40 GMT

@Anonymous wrote:
I am just very confused why my dico score can decrease over a 3 month period when I paid all bills on time including a mortgage and car loan and I have a 0% credot card UTIL ratio. Grrrrr!!

Closing this card WILL NOT affect AAoA. It will continue to factor into scoring for 10 years after the closing reported date. I wouldn't close it, especially with that line of credit. Simply let a small balance report on the next billing statement. Your accounts aren't showing any activity being reported at zero. I found this out a few years back, when mine were all reporting zero. I started rotating cards out, and let one report a very small balance each month, maybe 20$ or so, then payoff before next cycle closes.FICO likes to see some sort of usage to score accordingly. You should rebound some of those points with a little usage. In this economy, not many banks are extending those lines of credit anymore, without going through an extensive financial analysis.

Re: Closing a High Limit Credit Card

Anonymous — Fri, 19 Oct 2012 04:56:55 GMT

There is really no reason to close. You will still get approved for most things with that score. If you have any problems you can always recon. You will get generous credit limits on other cards by having that card on your report. Keep in mind, if you close it. It will still report positively for 10 years. The only problem I see with having that high of a limit, is for it to show even 1% utilization you have to charge at least $500. Which if you don't have spending that high. You will have problem charging that much every month.

Re: Closing a High Limit Credit Card

thom02099 — Fri, 19 Oct 2012 11:52:53 GMT

+1 what the others have said.

Bottom line is, unless you're looking for new credit (new loan specifically), a change in your score from 723 to 706 just isn't a big deal. Scores fluctuate. Follow the advice given above and you'll see the scores increase. A $50K CL is nothing to take lightly.

Re: Closing a High Limit Credit Card

Anonymous — Fri, 19 Oct 2012 15:37:36 GMT

@KIPPIE12 wrote:
@Anonymous wrote:
I am just very confused why my dico score can decrease over a 3 month period when I paid all bills on time including a mortgage and car loan and I have a 0% credot card UTIL ratio. Grrrrr!!
Closing this card WILL NOT affect AAoA. It will continue to factor into scoring for 10 years after the closing reported date. I wouldn't close it, especially with that line of credit. Simply let a small balance report on the next billing statement. Your accounts aren't showing any activity being reported at zero. I found this out a few years back, when mine were all reporting zero. I started rotating cards out, and let one report a very small balance each month, maybe 20$ or so, then payoff before next cycle closes.FICO likes to see some sort of usage to score accordingly. You should rebound some of those points with a little usage. In this economy, not many banks are extending those lines of credit anymore, without going through an extensive financial analysis.

By keeping AAoA I meant to keep the credit he has now (ie. not adding any more cards). Sorry, I realize I wasnt very clear as my last post was rushed.

Re: Closing a High Limit Credit Card

Anonymous — Sat, 20 Oct 2012 00:59:27 GMT

You DO NOT close the card for nothing. Just listen to OptimasPrime , you have to have a balance, If it is a 0, that doesn't build your credit. They want to see you can borrow and then pay it back. Keep it between 1-9% util. And your score will grow, that is how I got mine to 750+ and got a bunch of new CC before my score dropped. Now ,leave them alone and it will raise again....

Re: Closing a High Limit Credit Card

Revelate — Sat, 20 Oct 2012 03:18:26 GMT

Welcome to the forums!

If you're not charging anything, then your accounts may be ignored for inactivity if it's gone on long enough. The whole tradeline drops out of some calculations.

Also if you recently acquired the mortgage and/or auto loan, you may have been re-bucketed as well. There's a bunch of other resasons why your credit score may have dropped but closing a card is incredibly rare to be beneficial to one's FICO score as others have pointed out.... and unless you have a billizion cards (like 20+) it's not even worth considering that option.

Also I'll ask, where are you pulling your score from?

Re: Closing a High Limit Credit Card

CribDuchess — Sat, 20 Oct 2012 03:29:03 GMT

A card with a $50K limit might not be factored into your utilization for FICO scoring purposes. I might be wrong about this, but I am pretty sure I've read posts here that seem to indicate that a credit limit above $35K on a credit card does not factor into UTIL.

Re: Closing a High Limit Credit Card

Anonymous — Sat, 20 Oct 2012 04:16:08 GMT

@CribDuchess wrote:
A card with a $50K limit might not be factored into your utilization for FICO scoring purposes. I might be wrong about this, but I am pretty sure I've read posts here that seem to indicate that a credit limit above $35K on a credit card does not factor into UTIL.

I think this is partially true. AFAIK the portion of the tradeline in excess of 35k or 40k (I can't recall which one) would not factor into util calculations, but the first 35k would.

So, as I understand it- if the balance is reported as $500 then fico would treat it as 500/35k for util purposes rather than 500/50k. Not sure if this 15k exclusion would hold true for overall util or if it is tradeline specific

Re: Closing a High Limit Credit Card

Revelate — Sat, 20 Oct 2012 05:18:09 GMT

@Anonymous wrote:
@CribDuchess wrote:
A card with a $50K limit might not be factored into your utilization for FICO scoring purposes. I might be wrong about this, but I am pretty sure I've read posts here that seem to indicate that a credit limit above $35K on a credit card does not factor into UTIL.

I think this is partially true. AFAIK the portion of the tradeline in excess of 35k or 40k (I can't recall which one) would not factor into util calculations, but the first 35k would.
So, as I understand it- if the balance is reported as $500 then fico would treat it as 500/35k for util purposes rather than 500/50k. Not sure if this 15k exclusion would hold true for overall util or if it is tradeline specific

I'm not certain on this one, but admittedly I don't know many folks that I can go ask on 35K CL credit cards; however, some revolving accounts above the 35K mark tend to get counted as installment loans (LOC's specifically from what I've read), and as such I think they aren't utilized for revolving calculation. I could be wrong on this, but that's what's been reported here.

Re: Closing a High Limit Credit Card

youngandcreditwrthy — Sat, 20 Oct 2012 05:42:49 GMT

Why wouldn't limits that high get figured into util...??? Im just curious. My highest in on $12k :-(. Lol...

But to the op.... You need to use credit more... You know what they say... 'use it or lose it' ; that seems to ring especially true when it comes to credit. And keep that AU acct on your report!!!!

:-) best wishes

Re: Closing a High Limit Credit Card

Anonymous — Sat, 19 Apr 2014 13:49:42 GMT

Re: Closing a High Limit Credit Card

cashnocredit — Mon, 22 Oct 2012 02:45:31 GMT

Don't close it. Use it for purchases you otherwise make. Don't pay in advance. Let the balances report but pif after the statement cuts. Your FICO is hurting because you aren't using credit at all. Prepaying to get a zero balance reporting is counterproductive if you don't show prior usage,

It's been reported that high CLs (over 40k) may be discarded for FICO purposes. That could be a cause.

Re: Closing a High Limit Credit Card

HiLine — Mon, 22 Oct 2012 02:45:26 GMT

Can you request a credit limit decrease?