Closed Credit Cards & Utilization

[SouthJamaica]

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@Grim87 wrote:

Sounds like I am likely going to take a utilization hit, depends how Comenity reports it?

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Most likely yes you will take a utilization hit.

I have no specific knowledge of how Comenity reports it, but I don't see any possible way of reporting it so that it would not increase your aggregate revolving utilization.

[Anonymous]

I just did some googling trying to figure out what credit limit Comenity reports after  they close an account. I found this post:

https://ficoforums.myfico.com/t5/General-Credit-Topics/Comenity-not-updating-balance/td-p/5975964

In that case Comenity seemingly reported a 0 credit limit, causing the scores to drop by 70 points.

Although I'm not 100% sure that the scores are Fico scores. I'm also not 100% sure whether the poster actually looked at their credit report  or just assumed that  Comenity reported a 0 limit.

[Grim87]

Thank you for the research. My old Comenity Serta cars still shows its old limit, so it's wait and see.

[Grim87]

Although the link you sent in the first response makes the most sense and jives on what I've seen:

https://ficoforums.myfico.com/t5/Credit-Cards/Closing-Credit-Cards/td-p/347190

- If a closed CC account with a balance continues to report the original credit limit, then both the balance and the CL of the closed account will be used in the utilization calculations.

- If a closed CC account is reporting a zero CL, even if there is a balance on the CC, the card will not be included in the calculations.

- If a closed CC account is reporting a non-zero CL but has a zero balance, the card will not be included in the calculations.

- If a closed account reports a CL that is equal to the balance (balance chasing), then this will be included in the calculations.  This is the worst-case scenario with regard to utilization.

[SouthJamaica]

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@Grim87 wrote:

Although the link you sent in the first response makes the most sense and jives on what I've seen:

https://ficoforums.myfico.com/t5/Credit-Cards/Closing-Credit-Cards/td-p/347190

- If a closed CC account with a balance continues to report the original credit limit, then both the balance and the CL of the closed account will be used in the utilization calculations.

- If a closed CC account is reporting a zero CL, even if there is a balance on the CC, the card will not be included in the calculations.

- If a closed CC account is reporting a non-zero CL but has a zero balance, the card will not be included in the calculations.

- If a closed account reports a CL that is equal to the balance (balance chasing), then this will be included in the calculations.  This is the worst-case scenario with regard to utilization.

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And this is based on what?  An anonymous 2008 post with no supporting evidence or references?

The first example is inconsistent with my experience.

The second example seems highly doubtful.

The third and fourth examples seem obvious.

[Anonymous]

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@SouthJamaica wrote:

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And this is based on what?  An anonymous 2008 post with no supporting evidence or references?

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I prefer calling it  a post  by a Moderator Emeritus  listed under the Helpful Threads  in the ""credit card" subforum 

[SouthJamaica]

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@Anonymous wrote:

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@SouthJamaica wrote:

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And this is based on what?  An anonymous 2008 post with no supporting evidence or references?

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I prefer calling it  a post  by a Moderator Emeritus  listed under the Helpful Threads  in the ""credit card" subforum 

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Well I prefer calling it a navel orange.

But that doesn't change the facts, and doesn't make its incorrect statements correct.

[newmomnewme]

I just paid off my black hole (closed NFCU), so I should see next week what changes if any it makes....Ill keep you all posted. 

[SouthJamaica]

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@newmomnewme wrote:

I just paid off my black hole (closed NFCU), so I should see next week what changes if any it makes....Ill keep you all posted. 

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Congratulations on getting rid of that monster.

[Anonymous]

Hello,

You will take a hit because the balance will go against for UTIL but not the limit. I'm currently in the same boat. I'm paying down my closed cards to make my UTIL go down. I didn't even know this was a thing until recently. Now