topic Re: Closed Accounts in Understanding FICO® Scoring

Closed Accounts

Queenie17 — Sat, 06 Feb 2010 22:46:27 GMT

How are closed accounts viewed in terms of credit utilization since I have $0 available credit for 3 accounts? I'm currently paying as agreed, but they were originally closed for late payments more than 3 years ago.

Re: Closed Accounts

Anonymous — Sat, 06 Feb 2010 22:53:54 GMT

@Queenie17 wrote:
How are closed accounts viewed in terms of credit utilization since I have $0 available credit for 3 accounts? I'm currently paying as agreed, but they were originally closed for late payments more than 3 years ago.

Hello and welcome to the forums.

Are you saying that none of the closed accounts has a CL? Do you have other credit cards? Do they have current balances?

If you don't mind posting all your account balances vs. credit limits it will be easier to see how this might be affecting you.

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: Closed Accounts

Queenie17 — Sun, 07 Feb 2010 00:37:12 GMT

I just checked one of my credit reports and they report the limits, but the 3 accounts are listed as closed. I have 9 other credit card accounts in good standing and a student loan account in good standing. My scores are: TU: 612; Equifax: 624, and Exp: 547.

Thanks.

Re: Closed Accounts

Jazzzy — Sun, 07 Feb 2010 00:50:02 GMT

@Queenie17 wrote:
I just checked one of my credit reports and they report the limits, but the 3 accounts are listed as closed. I have 9 other credit card accounts in good standing and a student loan account in good standing. My scores are: TU: 612; Equifax: 624, and Exp: 547.

Thanks.

Hi, and welcome. Did you get a credit report that also gives you your utilization percentage? If you pull from here at myFICO, I think they will give you your utilization percentage...and doing the math and comparing the numbers are about the only way to tell if those credit limits on your closed accounts are being counted in your utilization.

Also, where are you getting your scores? Are they true FICO scores? Or are they from a vendor who is selling "credit scores"? It's good to monitor your reports, but be careful when it comes to scores. You want to make sure they are FICOs, since that is what the lenders look at. There are a lot of different scores out there, but most of them don't tell you much.

Re: Closed Accounts

Anonymous — Sun, 07 Feb 2010 00:56:31 GMT

@Queenie17 wrote:
I just checked one of my credit reports and they report the limits, but the 3 accounts are listed as closed. I have 9 other credit card accounts in good standing and a student loan account in good standing. My scores are: TU: 612; Equifax: 624, and Exp: 547.

Thanks.

If you could post those all those numbers it would certainly help.

Re: Closed Accounts

Queenie17 — Sun, 07 Feb 2010 01:24:43 GMT

Thanks for your help. Yes I got TU and EQ from myfico.com and the EX directly from Experian.

Re: Closed Accounts

Queenie17 — Sun, 07 Feb 2010 01:27:26 GMT

IT looks like the balances are included. My utilization is over 90% right now, but I'm paying them down so that my scores will go up.

Re: Closed Accounts

pizzadude — Sun, 07 Feb 2010 01:48:30 GMT

It appears that for me at least, fico scoring DOES consider both balances and credit limits from open and closed accounts when calculating utilization.

ScorePower report from Jan19 shows ratio of revolving balances to credit limit 3%.

By my calculations if the CL from my closed account was ignored I would show 12% utilization.

Cards 1,2,3 are open

Card 4 is closed ( also an AU account ).

Here are my numbers:

Balance CL ( shown on report )

card1 388 2500

card2 133 1000

card3 82 1250

card4 ( auth user/closed ) 2 13000

util with all accnts 3.4% 605 17750

util with open accnts 12.7% 603 4750

Re: Closed Accounts

Lel — Sun, 07 Feb 2010 04:38:09 GMT

If a closed account still has a balance AND a credit limit is still being reported, then it will be included in utilization.

If a closed account has a zero balance, then it will be removed from utilization.

If a closed account still has a balance BUT the credit limit is reported as $0, then the account is removed from utilization.

pizzadude, your illustration perfectly demonstrates how closed accounts with balances and credit limits are treated. Once you send in a check for $2, your utilization is going to go up.

Queenie17, you mentioned your closed accounts (which have balances) are still reporting CLs. This means that these accounts will still be included in utilization. You also mention that you have $0 in available credit for these accounts. I'm curious - have your CCs been dropping your CL as you pay down your balance? That is, let's say that you have a closed, maxed-out card with a CL of $1000. If you pay the balance down to $800, did your reported CL also drop to $800? This is a practice called balance chasing, and it makes it hard for persons with closed CCs to improve their score, since paying down the closed account balance doesn't in as much of a decrease in utilization as would happen if the CL were left intact.

Re: Closed Accounts

Queenie17 — Sun, 07 Feb 2010 05:38:15 GMT

I checked all 3 reports and the CLs have not dropped, although I tried to get one of them reopened since I have been paying on time for 24 mos, but they said no.

Thanks for your help.

Re: Closed Accounts

Anonymous — Tue, 23 Feb 2010 00:07:07 GMT

Sorry to jump in the bandwagon. I have a Citi card that I'm making payments on. It shows pays as agreed no lates ever - however it shows as DEROGATORY. The balance is $4600 and the Credit Limit is reporting as $0. It is DEFINITELY hurting my utilization. Is there something I can do, someone I can call...to make it report different so it doesnt hurt me as much?

Re: Closed Accounts

Jazzzy — Tue, 23 Feb 2010 00:27:29 GMT

@Anonymous wrote:
Sorry to jump in the bandwagon. I have a Citi card that I'm making payments on. It shows pays as agreed no lates ever - however it shows as DEROGATORY. The balance is $4600 and the Credit Limit is reporting as $0. It is DEFINITELY hurting my utilization. Is there something I can do, someone I can call...to make it report different so it doesnt hurt me as much?

Have you tried calling Citi?

You say it shows as derogatory. Does it give an explanation?

Re: Closed Accounts

Anonymous — Tue, 23 Feb 2010 00:43:26 GMT

Sorry, I've been lurking the forums all day and I have "FICOhead"

Citi is a cc account that went into a payment arrangement on 04-2008. High balance was $17,000. Scheduled to be completely paid off 09/16/2010. Current balance $4600. Monthly payment $600. Interest rate 9%.

They told me the account would be open and normal once I paid off. Now I'm almost ready to be done paying them, and excited about getting my CL back... they changed the tune and say it will be closed once the balance is $0. I've talked to them about keeping it open, they won't budge.

With the $0 CL and the $4600 balance, it is showing as one of my derogatories on EQ because it's being interpreted as a PAST DUE/OVERLIMIT balance, even though the account is not really reporting late. It's reporting normal on TU but with a $0 CL there too.

I guess, I'm trying to find a way for it to report some kind of limit, so it doesn't look like I'm OVERLIMIT while I work on paying it off in September.

Re: Closed Accounts

Jazzzy — Tue, 23 Feb 2010 00:59:06 GMT

Have you specifically talked with Citi about reporting a credit limit so that the account doesn't report as over the limit?

If not, I would try a phone call. Those calls are best made during business hours, as you may ultimately have to talk with a supervisor.

If you have already tried that to no avail, I would write a letter...yes...snail mail. Sometimes those written requests are actually paid attention to. I would write directly to the CEO or a VP. I would explain that you have done your part to honor your agreement, but that agreement shouldn't be hurting your credit score...and it is. It would be nice if they reported the original credit line, but...if they won't...then they should at least report a credit line equal to the balance until it's paid off.

I don't see anything to really dispute with the CRA. I think you're at Citi's mercy on this.

Re: Closed Accounts

Anonymous — Tue, 23 Feb 2010 01:02:30 GMT

Hm. I e-mailed a VP about letting me keep the account open based on the fact that I've never ever missed a payment before I fell into hard times - or after the payment arrangement was done. But it didn't occur to me to ask CSR to have them report a limit. That is a GREAT idea.

I'm gonna call tomorrow morning for sure.

Re: Closed Accounts

Anonymous — Tue, 23 Feb 2010 13:51:39 GMT

I called CSR. They said the account should be reporting as CLOSED, not as OPEN and therefore shouldn't have a CL. They suggested I dispute with CRAs to get them to report correctly. Ideas?

Re: Closed Accounts

New_Beginning — Sat, 28 Jun 2014 00:31:24 GMT

@Lel wrote:
If a closed account still has a balance AND a credit limit is still being reported, then it will be included in utilization.

If a closed account has a zero balance, then it will be removed from utilization.

If a closed account still has a balance BUT the credit limit is reported as $0, then the account is removed from utilization.

pizzadude, your illustration perfectly demonstrates how closed accounts with balances and credit limits are treated. Once you send in a check for $2, your utilization is going to go up.

Queenie17, you mentioned your closed accounts (which have balances) are still reporting CLs. This means that these accounts will still be included in utilization. You also mention that you have $0 in available credit for these accounts. I'm curious - have your CCs been dropping your CL as you pay down your balance? That is, let's say that you have a closed, maxed-out card with a CL of $1000. If you pay the balance down to $800, did your reported CL also drop to $800? This is a practice called balance chasing, and it makes it hard for persons with closed CCs to improve their score, since paying down the closed account balance doesn't in as much of a decrease in utilization as would happen if the CL were left intact.

Thanks for sharing this information. I have 3 accounts that have been closed about 2 years now, each has a balance with $0 credit limit. Should i continue to pay until paid in full? The accounts are no longer in collections as I am just simply working on paying them off. They are on my credit report as paying as agreed but listed as still have a negative impact, what should I do in this case...suggestions?

Thanks!.

Re: Closed Accounts

Anonymous — Sun, 29 Jun 2014 11:51:08 GMT

@New_Beginning wrote:
@Lel wrote:
If a closed account still has a balance AND a credit limit is still being reported, then it will be included in utilization.

If a closed account has a zero balance, then it will be removed from utilization.

If a closed account still has a balance BUT the credit limit is reported as $0, then the account is removed from utilization.

pizzadude, your illustration perfectly demonstrates how closed accounts with balances and credit limits are treated. Once you send in a check for $2, your utilization is going to go up.

Queenie17, you mentioned your closed accounts (which have balances) are still reporting CLs. This means that these accounts will still be included in utilization. You also mention that you have $0 in available credit for these accounts. I'm curious - have your CCs been dropping your CL as you pay down your balance? That is, let's say that you have a closed, maxed-out card with a CL of $1000. If you pay the balance down to $800, did your reported CL also drop to $800? This is a practice called balance chasing, and it makes it hard for persons with closed CCs to improve their score, since paying down the closed account balance doesn't in as much of a decrease in utilization as would happen if the CL were left intact.
Thanks for sharing this information. I have 3 accounts that have been closed about 2 years now, each has a balance with $0 credit limit. Should i continue to pay until paid in full? The accounts are no longer in collections as I am just simply working on paying them off. They are on my credit report as paying as agreed but listed as still have a negative impact, what should I do in this case...suggestions?

Thanks!.

This thread is more than four years old.

I'd suggest reframing your question and posting it in the Rebuilding forum.