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Scores that a creditor is known to cancel your acct at?

BrutalBodyShots
Super Contributor

Scores that a creditor is known to cancel your acct at?

Not sure if there is a data point thread by creditor on this or not?  And I do understand that more than just FICO 08 score can be taken into consideration for this.  For example, my local credit union with which I was a member for 15+ years cancelled my line of credit with them when my score dropped below 620 (619).  When I called and spoke to them, they said that 620 was their cutoff and any time someone dropped below 620 they would automatically close their account.  I was just wondering if anyone knew any other creditor data points with respect to this?

 

The time I think this would be most impactful would be when you have someone sort of "on the cusp" of these scores that is applying for new credit.  Basically people with "fair" credit that in apping for new credit due to inquiries/AAoA drop with new credit they could actually put one of their already existing credit lines in jeopardy of review and/or being closed if it falls below the acceptable threshold deemed to be acceptable by X creditor. 

 

Hopefully this question makes sense.

Message 1 of 10
9 REPLIES 9
RonM21
Valued Contributor

Re: Scores that a creditor is known to cancel your acct at?

The question does make sense, but usually it is not going to be just a score, as in the example you gave. The question maybe is what reasons were you given by a lender who closed your account.

I think in many cases, there will be single reasons like score, late payments, collections, BK, judgements, new accounts, new or too many inquiries, min payments on high balance, etc. Or any combo of the above.

It is a good subject that if people provided stats with the details, it helps others.
                

TCL: $306,100Utiliz: 6%AAoA: 5yrs 2mOther: Lease, Loan, *No MortgageCollections-Lates-BK's: 0

LWS-35k | BOA-50k | AMX-32.4k | DISC-33.6k | ALNT-25k | NFCU-33k | BARC-15k | BBUY-12k | CSE-10k | CP1-10k | CITI-11.7k | PF-38.4k


Message 2 of 10
Tubpbs
New Contributor

Re: Scores that a creditor is known to cancel your acct at?

I had that happen over time with a medium bank. I had basically 100% utilization for an extended time. I paid it down. They immediately followed my pay down with my limit basically. Then later on they didn't renew.

I was actually going to say that they didn't cite a score for their non renewal, but in writing this I realize that they did. But I don't remember what it was at all. I would say it was in and around that number though. Nothing much better. Truthfully, I thought it was a nonsense move, but I also can't blame them. That said, I can't blame them because of the card being maxed out for so long. Ignoring the interest they made on me and that I never missed a payment etc etc, that is something to be concerned about. If they closed your account just be chase of a score, that seems ridiculous. Obviously if your score is believe 620, there are several reasons, some of which are not positive, so I'm sure they contributed but you never know.
Message 3 of 10
pipeguy
Senior Contributor

Re: Scores that a creditor is known to cancel your acct at?

Last summer I was in the process of closing (selling asserts) for an estate, the estate was cash poor but asset rich. Since its difficult for an estate to obtain a line of credit, not impossible, but not easy, I was advancing costs to the estate which would be paid back once the estate settled. "costs" were close to $40,000 by the time everything settled, or at least until major assets were closed (real estate). I contacted DCU and another lender and explained my situation whereas I would basically max out my credit cards with them for a 3-6 months, and basically said if this will cause a problem I'll spread the costs over more cards and not max out yours. DCU especially came back and said "your credit line is there to use, all of it, as long as you keep up with payments we will not take any adverse action."

 

At the end of September I settled on the real estate sale and paid everyone off (Diner's - hidden account at the time about $12k of $20k CL and DCU about $7k of $7k CL, the rest was from my personal cash reserves). My scores took a moderate hit due to high utilization for a few months, recovered after paying off DCU, and DCU granted a CLI request a month or so later.

 

In another case: Today I carry a balance on only two accounts, a 0% Discover balance transfer and a 5.99% "project loan" from Lowes for a new roof a couple of years ago. Discover is always "suggesting" I take their balance transfers and I considered taking the $4300 balance I have on the Lowes project and transferring it to Discover - even though 5.99% is low, it's not as low as Discover's 3% (3% fee, zero percent for 12 months). I wrote discover with an inquiry as to how they would react if I did this transfer and took my account to just over 60% utility (since then I've had several CLI's and today it would be just under 50%). Got a fairly genric response from Discover and I did NOT take the balance transfer option since I wasn't sure it would be a good thing for that account and I like my Discover card a lot. 

 

My point of this story is, if you stay in touch with lenders, especially smaller lenders such as local banks and credit unions, you'll probably avoid balance chasing and adverse action - when these smaller lenders see risk, such as very high utilization they get spooked, but if they know why they tend to cut you a break - at least in my case.

 

 

Message 4 of 10
BrutalBodyShots
Super Contributor

Re: Scores that a creditor is known to cancel your acct at?

In my case my credit union specifically cited my credit score as the reason for cancelling my line of credit.  Reasons for my score drop were sort of a mix... a couple of late payments (never with the card in question, though) and some higher utilization on a few accounts (never the card in question, though).  Basically since my score was below 620, the system flagged me and my account was cancelled.  I tried to get them to reconsider, but had no luck.

 

I just didn't know if there were any bigger banks (Chase, Citi, etc) that had any sort of rules with respect to score cutoffs.

 

I would think the problematic case would be a guy with scores already barely good enough to get the card(s).  I don't know, say 650.  He goes on a spree and as a result of the inquires and new accounts say his scores drop to 620ish.. it would be rough if due to that score drop that the creditors that just approved him a month or two prior decided to then cancel his account.  I'm not sure if this type of thing ever happens, but if there were any score datapoints on this it would give guys with those "on the cusp" type scores a good reason to hold off on apping for a bit.

Message 5 of 10
UncleB
Moderator

Re: Scores that a creditor is known to cancel your acct at?

I don't have any data points with specific scores, but I can say with conviction that once you have some 30-day lates show up on your credit reports, if you have accounts with Synchrony you can expect to be balance chased or CLD even if you've always been on time with them.

 

It happened to me and some close relatives as well at different times.  My own experience was with Lowe's years ago; I was going through a job loss and would eventually lose my house, but at the time I was just starting to be late on a few cards (but ironically, not Lowe's).  They started balance-chasing me until my CL was $470 where it stayed for many years - I basically forgot about the card.

 

But as we all know, Synchrony can also be generous... I eventually got that card's CL not only back to where it once was, but significantly higher -  it's currently at $20k and is one of my highest (and is my oldest) credit line.  With my relative that had a similar situation it was Care Credit, and while they weren't balanced chased Synchrony cut their credit line by 50% in one month (their balance owed was low at the time, and they had never been late, either).

 

Note that I'm not complaining about the CLD/balance-chasing - on the contrary, it's understandable considering the circumstances.  I'm simply providing the facts here as a data point for others in the event they face a similar situation. 

Message 6 of 10
BrutalBodyShots
Super Contributor

Re: Scores that a creditor is known to cancel your acct at?

Understood.  I think a CLD is a nice happy medium between doing nothing and completely cancelling the line of credit.  I wish my credit union had thrown a CLD at me... sort of a "warning" and at least let me keep the line of credit (which was my oldest, 15 years) open.

 

Good to know about Synchrony!

Message 7 of 10
Revelate
Moderator Emeritus

Re: Scores that a creditor is known to cancel your acct at?


@UncleB wrote:

I don't have any data points with specific scores, but I can say with conviction that once you have some 30-day lates show up on your credit reports, if you have accounts with Synchrony you can expect to be balance chased or CLD even if you've always been on time with them.

 

It happened to me and some close relatives as well at different times.  My own experience was with Lowe's years ago; I was going through a job loss and would eventually lose my house, but at the time I was just starting to be late on a few cards (but ironically, not Lowe's).  They started balance-chasing me until my CL was $470 where it stayed for many years - I basically forgot about the card.

 

But as we all know, Synchrony can also be generous... I eventually got that card's CL not only back to where it once was, but significantly higher -  it's currently at $20k and is one of my highest (and is my oldest) credit line.  With my relative that had a similar situation it was Care Credit, and while they weren't balanced chased Synchrony cut their credit line by 50% in one month (their balance owed was low at the time, and they had never been late, either).

 

Note that I'm not complaining about the CLD/balance-chasing - on the contrary, it's understandable considering the circumstances.  I'm simply providing the facts here as a data point for others in the event they face a similar situation. 


DId not happen to me with my hardly ever used Walmart; admittedly it was only $1600 but they clearly saw the 30 day late on TU from October and they didn't blink.

 

Depends how long years ago was bud, as lender policies do change though admittedly the late was a stupid and there was never any balance to chase there or anywhere else.  Other lenders may have been unhappy, but since I don't really care about the TU pullers I have other than Barclays who didn't touch my Sallie, it didn't make any practical difference other than my score there will likely be depressed for some time to come.  Also the account was brought current in November, so I'm guessing there was some heightened scrutiny but nothing beyond that.... if I could trust TU and inquiries at the moment I'd go see about looking at my SP's, I should actually do that soonish before they fall off and see if I did spook anyone who reviews TU.

 

It's hard to generalize this topic as it depends on the market environment: if this were still 2009-2010 I'm guessing I would've been slapped by AA from any number of lenders for the 30 day late, now though /shrug.




        
Message 8 of 10
UncleB
Moderator

Re: Scores that a creditor is known to cancel your acct at?


@Revelate wrote:

@UncleB wrote:

I don't have any data points with specific scores, but I can say with conviction that once you have some 30-day lates show up on your credit reports, if you have accounts with Synchrony you can expect to be balance chased or CLD even if you've always been on time with them.

 

It happened to me and some close relatives as well at different times.  My own experience was with Lowe's years ago; I was going through a job loss and would eventually lose my house, but at the time I was just starting to be late on a few cards (but ironically, not Lowe's).  They started balance-chasing me until my CL was $470 where it stayed for many years - I basically forgot about the card.

 

But as we all know, Synchrony can also be generous... I eventually got that card's CL not only back to where it once was, but significantly higher -  it's currently at $20k and is one of my highest (and is my oldest) credit line.  With my relative that had a similar situation it was Care Credit, and while they weren't balanced chased Synchrony cut their credit line by 50% in one month (their balance owed was low at the time, and they had never been late, either).

 

Note that I'm not complaining about the CLD/balance-chasing - on the contrary, it's understandable considering the circumstances.  I'm simply providing the facts here as a data point for others in the event they face a similar situation. 


DId not happen to me with my hardly ever used Walmart; admittedly it was only $1600 but they clearly saw the 30 day late on TU from October and they didn't blink.

 

Depends how long years ago was bud, as lender policies do change though admittedly the late was a stupid and there was never any balance to chase there or anywhere else.  Other lenders may have been unhappy, but since I don't really care about the TU pullers I have other than Barclays who didn't touch my Sallie, it didn't make any practical difference other than my score there will likely be depressed for some time to come.  Also the account was brought current in November, so I'm guessing there was some heightened scrutiny but nothing beyond that.... if I could trust TU and inquiries at the moment I'd go see about looking at my SP's, I should actually do that soonish before they fall off and see if I did spook anyone who reviews TU.

 

It's hard to generalize this topic as it depends on the market environment: if this were still 2009-2010 I'm guessing I would've been slapped by AA from any number of lenders for the 30 day late, now though /shrug.


+1

 

Excellent point... both my example and my family member's were a few years ago when things were a bit more tight.  Smiley Wink

 

This is one time I'm actually thankful I don't have more current information to provide!  Smiley Happy

 

Side note:  I'm really glad it's no longer 2009-2010!  Smiley Very Happy

Message 9 of 10
Revelate
Moderator Emeritus

Re: Scores that a creditor is known to cancel your acct at?


@UncleB wrote:

Side note:  I'm really glad it's no longer 2009-2010!  Smiley Very Happy


Amen!




        
Message 10 of 10
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