Random closing of accounts?

[ntr1991]

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@DomoNomo wrote:

It will close due to inactivity.  I don't know if you guys remembered a chain store call Mervyn's.  I had a store card with them back in 2000 and never used it.  It closed in 2009.  At least that's what's reporting on my CR.  I believe if you use it, you won't lose it.

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Mervyn's went bankrupt (ch.7) in 2008, which is probably why it closed.

[Anonymous]

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@FinStar wrote:

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@bigblue7722 wrote:

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@Fico2Go wrote:
Of the account closures I read here seems many were related to irregular activities like:

Adding too many AUs.
Making too many payments per month.
Apping excessively after new acct opening.
Dramatic changes in DTC ratio.
Dramatic drop in scores.

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I didnt know making too many payments a month is a bad thing. Is making like 3 or 4 a lot?

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3 or 4 is not really going to place you on the radar - not hurting anything (normal).  I'm thinking this may be associated with an excessive number of payments (or an irregular pattern) - of course each lender views such excessive numbers differently.

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I would be very surprised if  the number of payments mattered in general, especially if you are paying via ACH online.   If you deliberately made lots of nuisance payments (1 cent ones for example) or sent in lots of checks that take time and thus money to process, then maybe.

But my guess is that any correlation with closure is really because of the needs for many payments.   This could happen because the user is spending many times the CL each month, and a bank might consider that risky behavior, (even if at any time you are under the CL).  Also, people engaging in heavy manufactured spend have to do this, and the issuers don't like that.

[eagle2013]

I think I read either here or on another board that a guy had his account closed due to adding too many AUs. Called Capital One, I think, and the only reason they gave him was fraud. Come to find out he admitted to selling AUs and was really upset they closed his account 

I know the random closures of accounts and CLDs were particularly widespread during the recession in 2008, for obvious reasons. I don't really see there being an issue regarding it now unless inactivity or suspcicious activity is involved.

I also read how the CCC 'track' your purchases and decide whether to do a CLD or perhaps close an account based off of your transactions. Not to hijack, but anyone know how true this is? 

[Anonymous]

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@eagle2013 wrote:

I also read how the CCC 'track' your purchases and decide whether to do a CLD or perhaps close an account based off of your transactions. Not to hijack, but anyone know how true this is? 

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Some truth at some times.  See, for example, http://www.nytimes.com/2009/01/31/your-money/credit-and-debit-cards/31money.html?pagewanted=all&_r=0

Not so much items as where you shopped.

[Gunnar419]

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@eagle2013 wrote:

I think I read either here or on another board that a guy had his account closed due to adding too many AUs. Called Capital One, I think, and the only reason they gave him was fraud. Come to find out he admitted to selling AUs and was really upset they closed his account 

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It was here. I remember that guy, though I couldn't find his post when I searched just now.

IIRC, that was one more case where somebody came on the forum crying that THEY CLOSED MY ACCOUNT FOR NO REASON AT ALL!! but as soon as people started asking questions it came out that he'd committed fraud.

I agree that "random" closings almost never are actually random. People have nearly always done something to alarm the ccc. Big culprits are too many inquiries/new accounts in a short time and maxing out a bunch of cards, anything that says somebody's desperate for credit.

[takeshi74]

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@Anonymous wrote:
I've been reading some threads on here and it kind of scares me that some CCCs will close an account even though it's in good standing, etc... Kind of scares me..

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In addition to everything already stated in this thread, one always has to be careful extrapolating trends based solely on forum postings as discussion forums are inherently skewed.

No need to worry unless you're doing something that creditors find questionable.  They don't just randomly close accounts.