topic Re: Should a closed card count towards utilization in Understanding FICO® Scoring

Should a closed card count towards utilization

Anonymous — Fri, 03 Sep 2010 05:44:25 GMT

I have a closed WF card with 8700 that I am paying down and an open Cap one card. The my fico reports included the WF balance in my score. however, any of the fako's I use (Ckarma and USAA) do not. Should the closed account count towards utilization?

Re: Should a closed card count towards utilization

MarineVietVet — Fri, 03 Sep 2010 06:13:55 GMT

@Anonymous wrote:
I have a closed WF card with 8700 that I am paying down and an open Cap one card. The my fico reports included the WF balance in my score. however, any of the fako's I use (Ckarma and USAA) do not. Should the closed account count towards utilization?

It depends.

- If a closed CC account continues to report the original credit limit, then this CL of the closed account will be used in the utilization calculations.

- If a closed CC account is reporting a zero CL, even if there is a balance on the CC, the card will not be included in the calculations.

- If a closed account reports a CL that is equal to the balance (balance chasing), then this will be included in the calculations. This is the worst-case scenario with regard to utilization.

From a BK years ago to:
EX - 9/09 pulled by lender 802
EQ - 7/06-663, 3/10-800
TU - 8/10-772
You can do the same thing with hard work

Re: Should a closed card count towards utilization

vanillabean — Fri, 03 Sep 2010 06:26:48 GMT

No, a closed account is generally not used for util. Do your FICO records using the account for util list it as open or closed? Are you sure it's used for util and if so how do you know?

Re: Should a closed card count towards utilization

Anonymous — Fri, 03 Sep 2010 06:20:12 GMT

Its showing original credit limit. But this puts me at 68% utilization instead of my current 0-10% - how frustrating!!

Re: Should a closed card count towards utilization

Anonymous — Fri, 03 Sep 2010 06:24:05 GMT

I know MyFico is counting it because all my open cards are paid off but the credit report is showing 68% utilization.

The account is also showing canceled by credit grantor - nasty divorce and had to go on a hardship plan for the account which meant closing the card

Re: Should a closed card count towards utilization

MarineVietVet — Fri, 03 Sep 2010 06:27:44 GMT

@Anonymous-own-fico wrote:
No, a closed account is not used for util. Do your FICO records using the account for util list it as open or closed? Are you sure it's used for util and if so how do you know?

If you read Closing Credit Cards you'll see where I got my infromation that sometimes a closed account is used in utilization calculation.

From a BK years ago to:
EX - 9/09 pulled by lender 802
EQ - 7/06-663, 3/10-800
TU - 8/10-772
You can do the same thing with hard work

Re: Should a closed card count towards utilization

vanillabean — Fri, 03 Sep 2010 06:46:28 GMT

@MarineVietVet wrote:

- If a closed CC account continues to report the original credit limit, then this CL of the closed account will be used in the utilization calculations.

Interesting. You may be right of course (lol, I did edit to add "generally"), but I just checked one of DW's credit reports. An account is listed as closed many years ago; its account type is revolving, and its credit limit is listed, but it is definitely not used for util.

Re: Should a closed card count towards utilization

vanillabean — Fri, 03 Sep 2010 07:33:48 GMT

@MarineVietVet wrote:
If you read Closing Credit Cards you'll see where I got my infromation that sometimes a closed account is used in utilization calculation.

I see. Maybe Lel can comment on the sentence that you quoted.

In the message primarily written by fused, I'm confused about this sentence in the "Utilization Percentages" section:

"Closed and opened CC TLs are weighed and scored equally by FICO." fused, I take it you are not referring to util?

Re: Should a closed card count towards utilization

Lel — Fri, 03 Sep 2010 08:04:22 GMT

Looks like that thread needs to be edited a bit.

If a closed credit card still has a balance and the credit limit is being reported, the blanace and credit limit will be used in utilization calculations. The key here is whether there's a balance or not. If either the balance or the credit limit of a closed credit card is reduced to zero, then it will be excluded from utilization.

Sorry about the confusion. I'll fix the thread when I'm on a more Forums-friendly device (i.e. A real computer).

Re: Should a closed card count towards utilization

MarineVietVet — Fri, 03 Sep 2010 17:05:44 GMT

@Lel wrote:
Looks like that thread needs to be edited a bit.

If a closed credit card still has a balance and the credit limit is being reported, the blanace and credit limit will be used in utilization calculations. The key here is whether there's a balance or not. If either the balance or the credit limit of a closed credit card is reduced to zero, then it will be excluded from utilization.

Sorry about the confusion. I'll fix the thread when I'm on a more Forums-friendly device (i.e. A real computer).

@ my-own-fico:

Oooppsss! I'm sorry for puttiing out slightly skewed information.

Re: Should a closed card count towards utilization

vanillabean — Fri, 03 Sep 2010 14:45:46 GMT

No problem. And thanks to the mods for being on top of it.

And they say educational can't also be entertaining.

Re: Should a closed card count towards utilization

Lel — Fri, 03 Sep 2010 18:01:20 GMT

@MarineVietVet wrote:

@ my-own-fico:

Oooppsss! I'm sorry for puttiing out slightly skewed information.

The information that you posted is only as good as your source, which wasn't that good. It's fixed now! It's good that this discussion came up so that this could be corrected. Thanks!