CLOSING ACCOUNT

[Anonymous]

Hi KMR.  I'd be happy to give you some help (as best I can) but I don't understand your post very well.  My comments below in blue.

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@kmr8 wrote:

Have a question here.

My AAoA is 2 yrs, oldest a/c was 3 yrs old. Have about 16 cards (14 open 2 closed).

My CU Card which is my 2nd oldest acct (opened within a month of the oldest one) was closed due to inactivity.  The CL was only $300. 

But my score dropped 20-30 pts (diff bureau FICOs).

Can you tell us the date that the account was closed?  You should be able to find this out by pulling your credit reports.  There should be a field in there called DATE CLOSED that will give you the exact date it was closed.

If you don't have a membership with Credit Karma, you should consider joining.  It is free.  You can ignore their scores but the actual full reports (EQ and TU) are quite valuable, and you can pull new ones with fresh data as often as once every 7 days.

While you are looking at the Date Closed field, look closely at the Balance of the account.  It's possible that the issuer closed the card but that the credit reports still have a balance listed on the card.  If so, this will hurt your score a lot.  FICO will consider you as being completely maxxed out on that card.

Great that you are telling us the CL on the closed card.  Can you also tell us your total credit limit (all cards together, not counting the closed card)?

While I have a 45-38% util on one card since 3 months back this doesnt seem to be because of that since i alreay saw minor drops for those.

I don't understand what it means to have a 45-38% util on a card.

All the graphs took a plunge when the closure was reported.

My TU FICO for eg:
07/16 799
08/16 785 (45% util on 1 card first reported; overall 6-9%)
09/16 785 (42% util on 1 card; 6-9% overall)
10/16 780 (40% util on that card; 6-9% overall)
11/16 776 (38% util on card1; 6-9% overall)
12/16 753 (35% util on card1; 6-9% overall)
01/17 751 (33% util on card1; 6-9% overall)
02/17 ??? (0% util on card1; 2% overall; closed a 2.2 yr old auto loan)

I am unsure what the above list means.  Sometimes you write "on 1 card" and other times "on card1."  Were the other 13 cards (card2, card3, card4, etc.) reporting at $0?

I am also unsure what "eg" means in  "TU score for eg".

Good that you are telling us your overall/total utilization.  Was it always reporting at < 8.99%?  Did it every go over that?

Also, Citi's 900-based score dropped from 790 to 750 in 12/16 after my 2nd oldest acct was closed.

My question is is this drop due to the high util aging or my acct closing?

I am unsure what "high util aging" means.

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Final thoughts:

What I can tell you for sure is that the account closing could not have caused your score to drop, unless one of the following three things happened:

(1)  The card issuer deleted the account completely from your credit reports.  This is possible (though uncommon).  Check your most recent reports to find out.

(2)  The reports show a positive balance on that closed card.

(3)  Losing the $300 on your total credit limit caused your total utilization to become greater than 8.99%.  If your total U stayed < 8.99% then the CL decrease should not have hurt your score.

[kmr8]

Sorry CreditGuyInDixie, somehow missed your response.

Card1 = 1 card

"TU for eg" - used fico score from my TU for example (similar pattern is seen in ficos from EQ and EX reports).

"45-38% util" - got an access check for 45% of cl (5.5k on 12k) and been paying off, at the time of my last score the util has reduced from 45 to 38%.

High util aging - Meant keeping a high balance on a card and maintaining 30+% balance for more than a few billing cycles.

I have 14 open and 3 closed cards with a total limit of ~120k.
All closed accounts are "paid off" and in good standing and they all remain on my report.

Two things that changed in my credit report were:
1. One of my cards started reporting high util and it remained high for the next 3-4 months. But total util never exceeded 9%. (First reported Sep 2016)

2. My oldest open account was closed. It only had a $300 cl. (Closing reported Dec 2016)

Apart from this I always maintain (small) balances in 3 or 4 cards but that util has been 1-4% per card of these cards and the # of cards with balance and util on each card has been mostly consistent for that period.

No HPs, no new accts during that period of score drop.

Fico dropped quite a bit when my 45% util was first reported but after that each month there was a small reduction in the score but the same month my card closure was reported it fell steeply.

Fico didnt like either that Im keeping a 30+% util for the third consecutive month or that my card was closed.

[Anonymous]

OK...It wont effect me in a negative way....what is the BENEFIT in closing it? I see it as a wash...its causing absolutely no problems just being there, getting used frequently...if it aint broke...LEAVE IT ALONE i hear works..

[Anonymous]

Hello MM!  Can you clarify something for us?

Your last post seems to suggest that you haven't decided whether to close the card in question, that you are weighing pros and cons and could decide either way.

Your first post, however, seemed to say that you already combined the two cards, and that the closure of one is now a past event (though very recent).

Which is a better description of your situation?

[Anonymous]

lol...I am a bit obtuse at times....I did combine the two Cap 1 cards...I am NOT closing the Credit 1 card...possibly I have replied about a DIFFERENT thread tho, about CREDIT 1

[Anonymous]

OK.  I think I understand.  Somebody else has suggested that you close your Credit 1 card (not the subject of your original post) and we have switched gears to talk about the pros and cons of closing the Credit 1 card.  Is that right?

If so, can you clarify a couple things?

      The Credit 1 card happens to be your oldest card, yes? 

      Is it also your oldest account?

      How old is it?

      What is you next oldest account and how is old is that one?

Basically if the Credit 1 is substantially older than your other accounts, and if it doesn't cost you anything to keep it open, then yeah I would tend to keep it open.  It you close it now, then in ten years your "Age of Oldest Account" will drop substantially, which will hurt your score (possibly not by much, but by some).