Is it just the utilization that will cause the FICO ding I wonder?
Yes, because you weren't 30 days late in actual payment and FICO scoring doesn't differentiate between the issuer closing the account and the cardholder closing the account (and neither do other issuers).
Im going to agree with everyone. They won't re-instate for a history of 2 returned payments. To a lender, that sets a future tone of financial issues.
Advise paying it off asap, because now your cc will show closed with a balance and maxed, and you will get dinged bad from FICO for that. Once its paid off, then your scores will rebound.
That being the case (it’s the utilization rate only), the score may not be greatly impacted and I’m not going to be reactive or panic. If the score drops based on higher utilization, I’ll just pay it off quickly or transfer the balance....
But I’ve learned a good lesson here!
Just so you know, that Lowes CL has now been taken out of the total available credit equation.
For example....lets say before this happened, you had 10 CC's with a total available credit lines of $20k across all cards. Lets say your balances on those cards came to $8k (including at the time, Lowes). Your overall utilization would be 40%.
Now, with Lowes taken out of the equation (the credit limit, not the balance), your available credit is minus $8k, giving the above senerio which is now ...$8k in overall balances with $12k now in available credit. You overall utilazation is now 67%.
This is why closed accounts with balances ding you, because they take away the available credit that was once factored in, but still count the balance. Once the account is paid off, scores will rebound since its a positive account.
Thanks Pizza1, I do understand. I’ll pay it off in a few months time, but will def check the score now, and then again when it’s paid off, to see the effect. I may still make the call to ask for reinstatement; they can only say no.
Thats right! I always recommend recon because you never know, you just might get lucky if you plead your case, especially if you have proof you can send them. But, understand from a lender point of view, 2 returned payments in 6 months doesnt look good, regardless of the situaiton and who was at fault. Lenders just see it has it being unstable financially, and them closing the card is being proactive for them. . Let us know what happened and good luck!