topic Re: Paying a closed account off in Understanding FICO® Scoring

Paying a closed account off

Anonymous — Sat, 10 Nov 2018 17:19:32 GMT

Hi everyone
I'm wondering if I should pay my
CLOSED Sam's credit card account balance to 0 and if so would that greatly affect my current scores to drop. I have been reading that even if you have a closed account but are making monthly payments it helps improve your score as long you are making monthly payments, but the minute it is officially closed and not reporting active payments to the bureaus, that account history and it current status of being closed will somehow drop your scores.
PLEASE HELP ME!!!!

Re: Paying a closed account off

Jnbmom — Sat, 10 Nov 2018 17:56:47 GMT

What does your credit profile look like? Other accounts, any negatives? Current FICO.

Accounts closed will still report up to 10 years so it helps with your age of accounts.

If you can pay it off by all means do that. I think we all sometimes focus more on scores than our financial situation (myself included).

But if you post your overall credit profile , we can make some suggestions.

Re: Paying a closed account off

Anonymous — Sat, 10 Nov 2018 18:05:11 GMT

Perfect....how do I post my overall credit profile on this platform so that you can get an idea of what I'm work with

Re: Paying a closed account off

Jnbmom — Sat, 10 Nov 2018 19:22:46 GMT

Just post your credit profile right on this thread then others can advise
Just list your accounts, balances etc.

Re: Paying a closed account off

beutiful5678 — Tue, 13 Nov 2018 07:55:40 GMT

Is the card in question charged-off or in collections or is it just a closed account?

List your existing accounts as follows:

CardName1 $X,XXX (CreditLimit1) $XXX (CurrentBalance1) XX% (InterestRate1)

CardName2 $X,XXX (CreditLimit2) $XXX (CurrentBalance2) XX% (InterestRate2)

CardName3 $X,XXX (CreditLimit3) $XXX (CurrentBalance3) XX% (InterestRate3)

CardName4 $X,XXX (CreditLimit4) $XXX (CurrentBalance4) XX% (InterestRate4)

Re: Paying a closed account off

Anonymous — Tue, 13 Nov 2018 13:27:23 GMT

Hi everyone
I'm wondering if I should pay my
CLOSED Sam's credit card account balance to 0 and if so would that greatly affect my current scores to drop. I have been reading that even if you have a closed account but are making monthly payments it helps improve your score as long you are making monthly payments, but the minute it is officially closed and not reporting active payments to the bureaus, that account history and it current status of being closed will somehow drop your scores.
PLEASE HELP ME!!!!

It sounds like you may be confusing the paying off/closure of a credit card with an installment loan. Assuming you have other revolving credit accounts, at least one of which has a small reported balance, closing a card and/or paying it off isn't going to impact your scores. In fact, the opposite may be true. A close account with a balance is often viewed as maxed out by the FICO algorithm. You'd then potentially be dropping from a maxed out card being your highest utilization account to whatever your next highest utilization account is. If that next highest account has a low balance, you could stand to gain 10-15 points from the removal of that maxed out account. If you have another maxed out account, you'd expect to see no score improvement.

Re: Paying a closed account off

RonM21 — Tue, 13 Nov 2018 13:38:20 GMT

@Jnbmom wrote:
What does your credit profile look like? Other accounts, any negatives? Current FICO.

Accounts closed will still report up to 10 years so it helps with your age of accounts.

If you can pay it off by all means do that. I think we all sometimes focus more on scores than our financial situation (myself included).

But if you post your overall credit profile , we can make some suggestions.

This is very true. Also the info in the above post makes a lot of sense.