Credit Card Closing and Utilization

[Anonymous]

If I close a credit card that has a $15K credit line, does that mean that my UTI is downgraded $15K as well?  (I hope I'm wording that correctly.  LOL)

[bdhu2001]

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@Anonymous wrote:

If I close a credit card that has a $15K credit line, does that mean that my UTI is downgraded $15K as well?  (I hope I'm wording that correctly.  LOL)

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It means that the available funds are decreased.  Thus if you only used 1% of the 15K, but your overall utilization was 10%, then your overall utilization will go up once you close the card.  Unless, you also pay down on all your other cards to keep your UTI at 1%.

[NRB525]

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@Anonymous wrote:

If I close a credit card that has a $15K credit line, does that mean that my UTI is downgraded $15K as well?  (I hope I'm wording that correctly.  LOL)

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The denominator in your Overall Utilization Percentage Calculation is reduced by $15k, yes.

[Anonymous]

The proportion of cards reporting balances may also change, (i.e., number of cards with balances vs. total number of cards), unless you are keeping your cards at zero balance reporting.

[Anonymous]

Thanks for all the replies.  From what I'm gathering then I guess I need to leave the card open and just let the credit card company close it if I'm not using it in the long run.

[Anonymous]

I would suggest using it every other month for just a $5 charge to keep it open. If the bank closes it for non-use, it will read" closed by credit grantor" on your report. That designation would only show up on a manual review, and may or may not have a lot of weight in decisioning, but it's probably best to avoid having that designation on your report if you can do so.

[Nova5041]

Yeaaaah, a 15k limit!!! I would keep that one unless there is an AF. Just buy something every 6 months, that type of cl, at least helps with padding of the utlization! Just my 2 cents.

[Anonymous]

I agree with everyone here, just make a small charge every so often. Or you can use it for one recurring charge you may have (i.e. Gym membership or something of the sorts) and set it to autopay full balance as well.

As far as the original question, removing the line of credit will bump up your util, assuming you carry a balance on your other cc's. For example:

Cc 1 = 3k used of 5k available
Cc 2 = 5k used of 10k available
Cc 3 = $0 used of 15k available

8k / 30k = ~27% util

Take away the 15k and now you have: 8k / 15k = ~53% util

Hope that helps!

[Anonymous]

Thanks to everyone.  I've had the card for almost 2 years now but just haven't used it as I've came a long way with my credit which was ruined because of my abuse of credit cards in the past.  I've learned a lot.  I don't even carry all of my cards in my pocket as I once did.  This has helped me to use credit responsibly.  My 3 FICO scores range from 667 to 683 at this point so I think I've started to use credit responsibly as I learn more from these forums.

[Mattopotamus]

Does it really matter if you close the card or if the CC comapny closes it for inactivity?