Closed accounts by creditor

Anonymous · ‎03-20-2009

I have read conflicting information regarding closed accounts by creditor. I just found out today that emerge closed my account. I had the card 10 years and had never been late but have high util 95% on that card. How is this going to affect util. Currently I have about 23700 of cl including emerge (has a 5K cl and owe about 4800) and an overall util of 33%. Will this change?? Some threads appear to say it will not have an impact other seem to make it appear that my util will increase.

fused · ‎03-20-2009

Welcome the forums!

When you close a CC without a balance both the CL and the balance are taken out of scoring. The history of the card remains in scoring. A CC that is closed with a balance changes the scoring. The CL will not factor in scoring but the balance will. Your scores might take a hit because your overall util will increase from 33% to 42%. As for accounts being notated as closed by the creditor on your reports, FICO scoring doesn't care. Lenders might have questions on why the creditor closed the account during a manual review of your reports. For more info on closing CCs, please look at the link in my sig line.

Anonymous · ‎03-20-2009

So for example if someone had 2 cards each with a 5k cl and both maxed out and one acount got closed then that person would have 200% util???

LindaLu · ‎03-21-2009

I have a similar situation..I filed bk7 may of 2007..Macys apparently never got notice..so when they just kept sending me bills I called...but they kept reporting me late up until oct 2007..I filed a dispute...they removed the amount from my credit report and made it zero..however that was last year and i just noticed that the lates through oct were never removed so I disputed...they took them out..added back the balance and said it said collection and show now a c/o on my report through experian for march 2009!!!??? It didn't change my score though so not sure it if affected anyhing ...but it is experian I disputed through and only experian shows this so is it experian that did this or Macy's??? confused on who to call

thanks for any help

Anonymous · ‎03-23-2009

@fused wrote:
Welcome the forums!

When you close a CC without a balance both the CL and the balance are taken out of scoring. The history of the card remains in scoring. A CC that is closed with a balance changes the scoring. The CL will not factor in scoring but the balance will. Your scores might take a hit because your overall util will increase from 33% to 42%. As for accounts being notated as closed by the creditor on your reports, FICO scoring doesn't care. Lenders might have questions on why the creditor closed the account during a manual review of your reports. For more info on closing CCs, please look at the link in my sig line.

So when you pay off the balance later on a card that has already been closed, the updated balance of 0 will then reflect in the FICO scoring, correct?