topic Re: Closed Revolving Account with large balances in Understanding FICO® Scoring

Closed Revolving Account with large balances

Anonymous — Wed, 09 Oct 2013 15:28:53 GMT

Would having a closed revolving account with a high balance (over $5k) be devastating to a credit score?

Re: Closed Revolving Account with large balances

Anonymous — Wed, 09 Oct 2013 15:43:25 GMT

You may want to read this: http://ficoforums.myfico.com/t5/Credit-Cards/Closing-Credit-Cards/td-p/347190

Re: Closed Revolving Account with large balances

Anonymous — Wed, 09 Oct 2013 17:00:43 GMT

I did, but this is not correct:

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

My lender sent me a copy of my report - I have 3 closed CC accounts with balances. Both the Balances and CLs are appearing on the report, however, the CL is not being taken into consideration in the report's "Credit Summary"

Re: Closed Revolving Account with large balances

Anonymous — Wed, 09 Oct 2013 17:06:36 GMT

What report a Tri merge?

Re: Closed Revolving Account with large balances

Anonymous — Wed, 09 Oct 2013 17:08:34 GMT

Yes

EQ Beacon 5

TU Classic 4

EX FICO 2

Re: Closed Revolving Account with large balances

Anonymous — Wed, 09 Oct 2013 17:12:48 GMT

The CLs are no longer available so they shouldn't be included as available credit. Based on your report, is the util correct?

Re: Closed Revolving Account with large balances

Anonymous — Wed, 09 Oct 2013 17:14:53 GMT

Sorry I dont quite understand what you mean by "is the utl correct"? There are no percentages in the report, just a credit summary that I did some calculations off of.

Re: Closed Revolving Account with large balances

Anonymous — Wed, 09 Oct 2013 17:17:24 GMT

I'm just trying to figure out what the CR agencies are/are not using to come up with my utilization percentage.

I just paid off all of the closed accounts with balances and I'm afraid that my scores aren't going to budge. Applying for mortgage soon.

Re: Closed Revolving Account with large balances

Anonymous — Wed, 09 Oct 2013 17:20:16 GMT

@Anonymous wrote:
I'm just trying to figure out what the CR agencies are/are not using to come up with my utilization percentage.

I just paid off all of the closed accounts with balances and I'm afraid that my scores aren't going to budge. Applying for mortgage soon.

you may want to ask in the mortgage section because different scoring models handle closed accounts differently, and its not the CR agencies that have the model,, its FICO

Re: Closed Revolving Account with large balances

Anonymous — Wed, 09 Oct 2013 17:28:54 GMT

I would also pull your 3 individual CR's. Its possible the Tri merge is inaccurate.

Re: Closed Revolving Account with large balances

Anonymous — Wed, 09 Oct 2013 17:33:53 GMT

I've already pulled my own CRs. All balances and CLs are correct in the trimerge.

The FAKO scores are much, much higher on my CRs but I guess that's not uncommon.

Re: Closed Revolving Account with large balances

Anonymous — Wed, 09 Oct 2013 17:37:47 GMT

To answer your question about what they should use:

They should use all outstanding debt -closed or open. To be sure, your LO or UW will be able to give you that figure now.

Re: Closed Revolving Account with large balances

Anonymous — Wed, 09 Oct 2013 17:48:42 GMT

yes, but did FICO use the credit limits of the closed revolving accounts with outstanding balances in its calculation of my util?

Re: Closed Revolving Account with large balances

Anonymous — Wed, 09 Oct 2013 18:02:05 GMT

Yes, as long as there is a balance showing on a closed account.

Edit: and the original CL is showing

Re: Closed Revolving Account with large balances

Anonymous — Wed, 09 Oct 2013 17:56:49 GMT

So then theoretically, when thes balances of these closed accounts update on my CRs as 0, the credit limits will no longer be used in the utilization calculation and my utilization won't change at all, hence, no score change.

This is my fear.

Re: Closed Revolving Account with large balances

Anonymous — Wed, 09 Oct 2013 18:00:45 GMT

If the closed accounts show anything other than a zero CL but a zero balance -it will not be used in utilization.

Re: Closed Revolving Account with large balances

Anonymous — Wed, 09 Oct 2013 18:05:34 GMT

I understand that.

So from what you're telling me it was pointless to pay off these 3 accounts as it will have no effect on my credit score.

Re: Closed Revolving Account with large balances

Anonymous — Wed, 09 Oct 2013 18:06:06 GMT

I didn't say that at all. If they are closed with zero balances then the debt won't count against your util but keeping them with a balance could affect your dti ratio.

Re: Closed Revolving Account with large balances

Anonymous — Wed, 09 Oct 2013 18:10:19 GMT

From my calculations, even though I paid off $25k worth of debt my utilization will not change and therefore the scoring (most important to me right now) will not change. This is what I am taking away from this thread. Is that safe to assume?

Re: Closed Revolving Account with large balances

Anonymous — Wed, 09 Oct 2013 18:17:18 GMT

I would hate to assume anything. If you do not wish to contact your LO and ask them if paying off the closed accounts was helpful then maybe a post in the mortgage section will give you some assistance.

Meanwhile, I will keep looking for answers for you.