Dormant Cards: Impact/Strategy

[Fletcher2]

I am wondering how dormant [credit card] accounts impact credit, if at all—both when allowing to go dormant and when used again, thereby changing them to 'active' or however classified.

I ask, as I have a dozen plus accounts. Currently, I let 2 report each month and have the 2 reporting cards report every 5 months to avoid the 6 month 'dormant' classification I see w/ Experian.  Next month, 2 different cards report and they will be scheduled to report again 5 months from the last reporting date, thereby never allowed to go 'dormant'. 

I do, however, use each and every card each and every month, so they aren't inactive with the respective issuer and I don't get my CL chopped/account closed.

HOWEVER, I can't help wondering if this micromanagement is for naught. So my questions are:

• If a card is allowed to go dormant, does that credit line get removed from the utilization formula (e.g., if I have a card with a $25K credit limit and allow it to go dormant, would my total aggregate credit line used in the UTL calculation drop by $25K)?
  
  
  
• Are there any potential downsides to allowing them to go dormant with the credit bureaus (but still continuing to use them each month to appease the CC companies)?

None of these cards have the potential to become daily drivers again, so each is used (and allowed to report) purely to keep everyone happy. However, I would be happier if I could just let 10 out of 12, for example, go dormant and never report a balance whatsoever. 

There seems to be a lot of opinions and thoughts from decade old threads, but hoping perhaps there's more of a consensus/understanding now and you can talk me down from micromanaging cards best left dormant.

[SouthJamaica]

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@Fletcher2 wrote:

I am wondering how dormant [credit card] accounts impact credit, if at all—both when allowing to go dormant and when used again, thereby changing them to 'active' or however classified.

I ask, as I have a dozen plus accounts. Currently, I let 2 report each month and have the 2 reporting cards report every 5 months to avoid the 6 month 'dormant' classification I see w/ Experian.  Next month, 2 different cards report and they will be scheduled to report again 5 months from the last reporting date, thereby never allowed to go 'dormant'. 

I do, however, use each and every card each and every month, so they aren't inactive with the respective issuer and I don't get my CL chopped/account closed.

HOWEVER, I can't help wondering if this micromanagement is for naught. So my questions are:

• If a card is allowed to go dormant, does that credit line get removed from the utilization formula (e.g., if I have a card with a $25K credit limit and allow it to go dormant, would my total aggregate credit line used in the UTL calculation drop by $25K)?
  
  
  
• Are there any potential downsides to allowing them to go dormant with the credit bureaus (but still continuing to use them each month to appease the CC companies)?

None of these cards have the potential to become daily drivers again, so each is used (and allowed to report) purely to keep everyone happy. However, I would be happier if I could just let 10 out of 12, for example, go dormant and never report a balance whatsoever. 

There seems to be a lot of opinions and thoughts from decade old threads, but hoping perhaps there's more of a consensus/understanding now and you can talk me down from micromanaging cards best left dormant.

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I don't think the absence of a reported balance has anything to do with an account being dormant.  Since you are using your cards each month, I don't think you have anything to worry about.

A card which is in use is not dormant.

https://www.creditcards.com/glossary/term-dormant-account/

https://wallethub.com/answers/cs/dormant-account-on-credit-report-2140678258/

https://fastercapital.com/content/Dormant-Credit-Cards--Tips-to-Revive-Your-Inactive-Plastic.html#Un...

[NoHardLimits]

I'm a micromanager too.  I've been behaving just as you described.  Currently 12 open cards, all cards kept alive by some usage with most having activity every month.  I also rotate the cards which report a balance so that no card reports zero for more than 4 months in a row.

There is evidence about FICO placing less importance on tradelines that truly go dormant.  However, I believe that Experian dormant account message is just a remnant of their specific CMS (Credit Monitoring Service) coding because it can be triggered by zero reported balances even when the accounts are being constantly used.  

Is my behavior truly necessary?  No, of course not.  My profile produces 800+ scores no matter how much or how little I micromanage.  But, I happen to enjoy testing the FICO system to see how my actions cause fluctuations in scores.  It's just a nerdy hobby.

[AC20]

I am interested in this general topic as well. I have 13 cards which is too many for my current usage/interest in micromanaging. You are going a lot further than I am in terms of micromanaging with some caveats. I have a disability trust that reimburses some of my expenses, so I try to pick a card or two for those expenses each month. That means I have usually 2 accounts report a decent balance each month and most cards report like that roughly twice a year. Outside of that, I don't worry about whether an account reports a balance or is even used most months. I do try to use each card at least once every 6 months, but I typically pay everything before the statement date unless it is being reimbursed. 

That said, I have a VS card that I am keeping open purely for aging factors. I often let that go more than 6 months without any use at all. So far, I have not noticed this having an impact on anything with the exception of possibly slower CL growth than I might get if I used the card more. 

I have developed a weird thing I do where I try to hit 10% usage per 6 month period on all the cards where I hope to grow the CL. So if a card has a CL of 10,000, I try to spend 1,000 every 6 months or 2,000 a year. This is a royal pain in the patootie and costs me a lot of time and effort. Which is fine, but I have no idea if I actually gain anything from doing it. What is worse, this combined with the situation with my trust means that it is hard to try to maximize cash back on my expenses (I don't really travel so I am all cash back). 

I don't know where you are seeing cards reported as "dormant". If you tell me where you are seeing that, I can look back and see if that has ever happened to me and if so what kind of impact it might have had on my scores and can maybe give you a bit more detailed information as to what happens when I don't use a card for a while. 

To be clear, I am careful with my older cards and any other cards where if I would be really upset if the bank closed the card on me. Except VS. That card really helps my aging factors, but I really don't need another VS purse I will never use. 

[mgood]

@Fletcher2 wrote:

• If a card is allowed to go dormant, does that credit line get removed from the utilization formula (e.g., if I have a card with a $25K credit limit and allow it to go dormant, would my total aggregate credit line used in the UTL calculation drop by $25K)?

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No.

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@Fletcher2 wrote:

• Are there any potential downsides to allowing them to go dormant with the credit bureaus (but still continuing to use them each month to appease the CC companies)?

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I don't think so. Pretty sure the answer here is no also.

[Gunnerboy]

@Fletcher2 ,

Can't say for sure if dormant cards have their CL excluded from utilization.  I would guess no.

I know that my dormant accounts still get reported to EQ/EX with timely payments, including a BECU line of credit unused for 13yrs.

[NoHardLimits]

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@AC20 wrote:

I don't know where you are seeing cards reported as "dormant". If you tell me where you are seeing that, I can look back and see if that has ever happened to me and if so what kind of impact it might have had on my scores and can maybe give you a bit more detailed information as to what happens when I don't use a card for a while. 

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I see that message when viewing my Experian Credit Works service.  It's not a FICO message.

[Gunnerboy]

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@AC20 wrote:

I don't know where you are seeing cards reported as "dormant". If you tell me where you are seeing that, I can look back and see if that has ever happened to me and if so what kind of impact it might have had on my scores and can maybe give you a bit more detailed information as to what happens when I don't use a card for a while. 

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Credit Karma sends an alert when a "dormant" account shows new activity, reported by lender.

[SouthJamaica]

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@NoHardLimits wrote:

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@AC20 wrote:

I don't know where you are seeing cards reported as "dormant". If you tell me where you are seeing that, I can look back and see if that has ever happened to me and if so what kind of impact it might have had on my scores and can maybe give you a bit more detailed information as to what happens when I don't use a card for a while. 

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I see that message when viewing my Experian Credit Works service.  It's not a FICO message.

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Exactly. It's a user-initiated message, with no FICO implications.

[Fletcher2]

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@NoHardLimits wrote:

I'm a micromanager too.  I've been behaving just as you described.  Currently 12 open cards, all cards kept alive by some usage with most having activity every month.  I also rotate the cards which report a balance so that no card reports zero for more than 4 months in a row.

There is evidence about FICO placing less importance on tradelines that truly go dormant.  However, I believe that Experian dormant account message is just a remnant of their specific CMS (Credit Monitoring Service) coding because it can be triggered by zero reported balances even when the accounts are being constantly used.  

Is my behavior truly necessary?  No, of course not.  My profile produces 800+ scores no matter how much or how little I micromanage.  But, I happen to enjoy testing the FICO system to see how my actions cause fluctuations in scores.  It's just a nerdy hobby.

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Nice. Cut from the same cloth...but do you do this when the statement closes to ensure activity on each card? I need help. 

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