Question about closed businessed and cc balances/UTI

[Momagain]

I have a store credit card (Comenity) that the company closed the stores (BK) and a Visa card (via Verizon) that they are no longer utilizing the card and closed all of the accounts.  I am currently paying these cards, but am curious how they affect utilization since paying them wouldn't (I assume) open up any additional available credit.  Anyone know how that works as far a UTI?  I am paying down various balances to get all accounts to the next lower break point for uti and not sure how to approach these.

[Anonymous]

@Momagain If I'm being too nosey, just ignore me. However, you have made me a little curious.

You mentioned a Verizon Visa, but you clearly do not mean the currently promoted Synchrony Bank Verizon Visa -- so Verizon offered a Visa card BEFORE Synchrony Bank?! 😮 With which bank?

Also, may I know which Commenity Bank Card you are referencing which filed for bankruptcy? I am intrigued by Corporate Failures -- especially giants and household names like Sears, JCP, Barnes and Noble, etc...

[Momagain]

Visa Home was an offer via Verizon...(which I have never had)  Back of card shows Bank of  Missouri, serviced by Home Credit US.  Goodys (clothing store) is the one that filed for BK.  Not nosy at all!

[Anonymous]

@Momagain Wow! I had no idea Goody's was no more!

To your question, certainly wait for the real experts to chime in -- but from my experience dealing with my family's cards and profiles -- paying down a closed account does not affect UTL whatsoever. We always just drag out paying closed accounts IF budgeting for a UTL pay down.

[Momagain]

Goodys filed for BK protection...our store closed.  There was some talk about maybe transitioning to a Gordman's, but it never happened here.  UTI paydown is what determines where we apply the bigger payments....so that info was helpful!  Thanks!

[Anonymous]

@Momagain I had this experience when Wayfair shifted its portfolio from Comenity to Citi last year. I wasn't offered the Comenity MC so my account was simply closed. I had a $10,500 credit line with roughly $740 outstanding on it when it closed. My utilization never budged from my calculations when I included it. My experience was that the usage and the limit were both included until the card was paid off, at which time it simply ended. My balance was on a 0% offer and I had read that my utilization and score would be unaffected so I simply paid it down over several months to keep that credit line factored in until it was done.

[Momagain]

ImTheDevil,  thanks for the response.  So I probably need to include those when transitioning to my next lower level of utilization.  Currently my individual utilization is all over the place.  My plan is to pay each card to the next lower utilization rate, starting at my higher numbers.  Over the next 30 days, I will be able to pay and additional $10,000 toward debt (stimulus and recouping depreciation on the roof replacement we just completed) so all individual debt will lower to the next break point. Just curious if I should include those 2 closed cards as far as utilizaion or not.  As always, you are a wealth of info.  Thanks again

[Anonymous]

Thank you, and you're very welcome I would continue to include them. An account closed in bad standing will count the balance but not the former limit, so that particular account will show over 100% utilization. One closed in good standing by the credit grantor often will be before the consumer had it paid off, and the algorithm seems not to penalize the consumer for a closure that was out of their hands. I would continue to count the two cards as if they were open.