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Utilization? Balance on Closed Account

RobertEG
Legendary Contributor

Re: Utilization? Balance on Closed Account

Closing of a revolving account only prevents the consumer from continuing to make purchases, and thus increase the debt.

It does not otherwise discontinue the ability to report account information, such as the balance and current approved credit limit.

While additional use of unused balance on that CL may be restricted, there is no requirement in the CRA credit reporting manual that the credit limit is no longer reportable on a closed account.

 

There is no CRA policy that credit limit is deleted on closed accounts, and I am aware of no policy statement by Fair Isaac that the change the scoring of % util using the current balance as the "credit limit" once an account is closed.

My understanding of % util scoring continues to be what is stated in the old, cited post.

Message 11 of 14
NavyChief52
Valued Member

Re: Utilization? Balance on Closed Account

I'm in a similar situation with a closed account - It is reporting a $5000.00 Credit limit and a $1615.00 balance.

 

On Experian

If I add up the total of all balances, it does include the $1615.00 balance.

If I add up the total of all credit limits, it does NOT include the $5000.00 Credit limit on the closed card.

 

It is clearly marked as Closed .






Personal:

Business
Message 12 of 14
BrutalBodyShots
Super Contributor

Re: Utilization? Balance on Closed Account

The account would still display the $5000, but your CL on that account is no longer $5000 since additional purchases cannot be made against that credit limit.  The usable credit to you on that account is now nothing.  The question then is whether or not the FICO algorithm considers the account maxed out or not since you still possess a balance against no limit. 

 

The $5000 is not being included in your total limits by Experian because it is not part of an open [usable] trade line.

Message 13 of 14
CreditCuriosity
Moderator

Re: Utilization? Balance on Closed Account

Just doing some house cleaning and closing thread as been near a year old.  If you want to carry this conversation on please feel free to open a new thread.  Thanks

Message 14 of 14
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