@Anonymouswrote:
From what I understand, a closed account's CL will only factor into util if they are still reporting a balance
Hi Tibby. It's actually worse than that. The CL of a closed account is always considered by FICO to be $0 (regardless of what it says on the report). But the balance on a closed account is always counted (by FICO) toward one's utilization.
Thus a closed account with a positive balance is bad in at least a couple ways. Because the balance is greater than the credit limit (any positive number is greater than 0) FICO considers your individual utilization on the card to be > 101%. That's bad. And the balance is also added toward one's total utilization, except that you are not getting the benefit of the previous credit limit.
The above is a summary of what the veterans on the FICO scoring subforum seem to be say pretty consistently. I don't have any closed accounts with balances so I cannot say from my own experience.
PS. Our OP should consider getting any closed account that erroneously reports a positive balance corrected. It's possible that FICO is able to detect (via some credit bureau flag) when an account has been closed due to being lost and therefore treats it more leniently -- but I would not assume that to be the case.
Curious to hear whether the OP had taken a score hit since he began t have a closed account with a positive balance.
He may find that the CRAs will correct the problem on their own. Sometimes the lost card listed as closed will only be there for a couple months.
Regardless, if he does decide to dispute, he should be careful to clarify that the current account listed (correctly) as open is fine -- otherwise the CRA might inadvertently delete both accounts.
