topic Re: How Does Fico View Closed CC Payments in Understanding FICO® Scoring

How Does Fico View Closed CC Payments

bigman023 — Tue, 26 Jan 2010 03:51:37 GMT

Just wondering if anyone knew how fico views payments on closed CCs. Does paying on these kind of accounts do any good for your score, or is it best to pay the balance off as quick as possible? I have a closed CC with a $200 balance. The monthly payment is $10. No finance charges. Is it better to pay off asap. Or do the on time monthly payments help your fico score in any way.

Thanks

Message Edited by bigman023 on 01-25-2010 07:51 PM

Re: How Does Fico View Closed CC Payments

daisyduke — Sun, 31 Jan 2010 18:10:53 GMT

Hi Bigman,

It is my understanding that a closed account with a balance gets factored into your utilization, so it could affect your utilization. However, it is only $200 so it's not really that much. do you have late payments associated with this account that perhaps you are trying to dilute with on time payments?

I also believe, could be wrong, that FICO scoring doesn't "give points for paying on time", but rather at the 24 month mark of last late payment, it is not that severe as it was before.

I hope this helps.

Re: How Does Fico View Closed CC Payments

Anonymous — Sun, 31 Jan 2010 19:01:59 GMT

@bigman023 wrote:
Just wondering if anyone knew how fico views payments on closed CCs. Does paying on these kind of accounts do any good for your score, or is it best to pay the balance off as quick as possible? I have a closed CC with a $200 balance. The monthly payment is $10. No finance charges. Is it better to pay off asap. Or do the on time monthly payments help your fico score in any way.

Thanks
Message Edited by bigman023 on 01-25-2010 07:51 PM

As daisy said it still counts into your uitilization but in my opinion you should always pay ANY debt off as fast as possible. Being debt free is my #1 goal. Always.

From a BK years ago to:
7/09 TU-742 EQ- 779
8/09 TU-765 EQ- 783
9/09 EX pulled by lender 802

You can do the same thing with hard work.

Re: How Does Fico View Closed CC Payments

bigman023 — Sun, 31 Jan 2010 23:29:11 GMT

@daisyduke wrote:
Hi Bigman,
It is my understanding that a closed account with a balance gets factored into your utilization, so it could affect your utilization. However, it is only $200 so it's not really that much. do you have late payments associated with this account that perhaps you are trying to dilute with on time payments?

I also believe, could be wrong, that FICO scoring doesn't "give points for paying on time", but rather at the 24 month mark of last late payment, it is not that severe as it was before.

I hope this helps.

LOL..... thats exactly what I was trying to do. I hope monthly on time payments is the right way to achieve this. However, if they allowed me to payoff the balance at a discount, I think I would take that deal

Thanks for the reply.

Re: How Does Fico View Closed CC Payments

daisyduke — Mon, 01 Feb 2010 00:19:24 GMT

I asked a similiar question BigTim....but I was dealing with a 29 percent interest rate....so it's a little different.

http://ficoforums.myfico.com/fico/board/message?board.id=rebuildingcredit&message.id=88155&query.id=104110#M88155

Re: How Does Fico View Closed CC Payments

bigman023 — Mon, 01 Feb 2010 01:06:58 GMT

@daisyduke wrote:
I asked a similiar question BigTim....but I was dealing with a 29 percent interest rate....so it's a little different.

http://ficoforums.myfico.com/fico/board/message?board.id=rebuildingcredit&message.id=88155&query.id=104110#M88155

Thanks for the link. So if Im reading correctly, the balance of a closed account is counted toward utilization, but the CL of the closed account is not, which of course works against you. Hmmm. I will just make sure it's paid off 2 months prior to me applying for credit.

THANKS for the info!!!

Message Edited by bigman023 on 01-31-2010 05:06 PM

Re: How Does Fico View Closed CC Payments

daisyduke — Mon, 01 Feb 2010 01:19:08 GMT

Hi Bigman, sorry about the wrong name.

Yes, you are correct. when an account is closed, there is no avail. credit and IF a balance is owed on a closed account, it can affect your utilization.

Really depends on your overall utilization as well...The entire picture can vary from one person to the next, depending on current avail. credit.

For example, when i paid off Dell, the two hundred I owed, I saw little affect in my utilization because it was such a small amount compared to credit avail. to me...I hope this helps.

You are welcome

Re: How Does Fico View Closed CC Payments

Jazzzy — Mon, 01 Feb 2010 04:10:11 GMT

@bigman023 wrote:
@daisyduke wrote:
I asked a similiar question BigTim....but I was dealing with a 29 percent interest rate....so it's a little different.

http://ficoforums.myfico.com/fico/board/message?board.id=rebuildingcredit&message.id=88155&query.id=104110#M88155

Thanks for the link. So if Im reading correctly, the balance of a closed account is counted toward utilization, but the CL of the closed account is not, which of course works against you. Hmmm. I will just make sure it's paid off 2 months prior to me applying for credit.

THANKS for the info!!!

I don't think this is correct. I think both the balance and the credit limit count...until the balance is paid to zero. Then neither count.

I have seen the strategy put forward to pay off open accounts first because as soon as you pay off the closed account, the credit line goes away forever.

If you have no finance charge on this, I don't believe there is any harm in dragging it out. Just don't forget to make the payment.

Re: How Does Fico View Closed CC Payments

Anonymous — Tue, 02 Feb 2010 23:44:24 GMT

@LynetteM wrote:
@bigman023 wrote:
@daisyduke wrote:
I asked a similiar question BigTim....but I was dealing with a 29 percent interest rate....so it's a little different.

http://ficoforums.myfico.com/fico/board/message?board.id=rebuildingcredit&message.id=88155&query.id=104110#M88155

Thanks for the link. So if Im reading correctly, the balance of a closed account is counted toward utilization, but the CL of the closed account is not, which of course works against you. Hmmm. I will just make sure it's paid off 2 months prior to me applying for credit.

THANKS for the info!!!
I don't think this is correct. I think both the balance and the credit limit count...until the balance is paid to zero. Then neither count.

I have seen the strategy put forward to pay off open accounts first because as soon as you pay off the closed account, the credit line goes away forever.

If you have no finance charge on this, I don't believe there is any harm in dragging it out. Just don't forget to make the payment.

Conflicting answers in this thread, I do hope your response is the correct one because I have been paying down some accounts as I am in the high utilization area on the majority of them, I had a Lundstroms jeweler account, Lundstroms went out of buisness and GEmoney bank closed my account.

It had a 5k limit and I currently owe 2800. I have been paying it all time and rather then focusing on getting rid of it faster I have been bringing down balances on other open accounts...

Re: How Does Fico View Closed CC Payments

bigman023 — Wed, 03 Feb 2010 01:51:15 GMT

As far as utilization goes, FICO is not including the limit on my closed account. I did the math, and FICO appears to only be using the limits for my open accounts. Although, this may be because the CL for the closed account is not listed on the report. Only the balance.

Message Edited by bigman023 on 02-02-2010 05:51 PM

Re: How Does Fico View Closed CC Payments

daisyduke — Wed, 03 Feb 2010 01:52:54 GMT

Bigman, sorry if I caused confusion - i appreciate the response.

Re: How Does Fico View Closed CC Payments

bigman023 — Wed, 03 Feb 2010 02:01:33 GMT

NO confusion. I think your analysis may be the correct one. FICO is not using my limit on the closed account, but it is using the balance.