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Closed PLOC with balance reporting 100% utilized

NRB525
Super Contributor

Re: Closed PLOC with balance reporting 100% utilized


@SouthJamaica wrote:

@NRB525 wrote:

Wow, so many questions. 

 

Are you going to leave it as 100% and not pay it off? ( rhetorical question )

Of course I'm going to pay it off ASAP.

Yes, I figured you might Smiley Happy

How long has it been since it converted to a required pay down?

A month.

Hmmm, so perhaps some other changes to the reporting may turn up?

You're sure Santander is not going to pick it up, or create an open "time payment" account to record future payments?

Not sure what you mean. Santander has never said to me that the account would be closed or is closed. They simply said it was leaving the "draw" phase and would be in a 5-year "repayment" phase.

Again, I'd be waiting to see if they sort something else out on their end, to send to the bureaus.

What is the credit product description that is now on your credit reports for this account?

Line of credit; listed under revolving accounts.

When TU reports balance changes on MyFIOC, what balance total does it use for "Total Revolving Accounts" vs "Total Credit Card Accounts" balances? Can you reconcile where this account fits in the mix of "Type of Account" totals that TU routinely provides in the MyFICO Notifications? 

Yes it's in total revolving accounts.

I don't think there is any debate whether an account can be closed with, and thus report as, 100% utilized when closed. If the account is truly 100% utilized, that is the correct reporting to the bureau when it is closed. 

Well you say there is no debate, but there are people in this forum who have claimed that that does not happen.

 

What is in debate is, if an account is closed with low utilization, as the few thousand I had on a several thousand card limit, then when I paid it down to a few hundred, it still reported the same several thousands limit. In that case my closed card was a low utilization closed card in the overall mix of cards, some with higher utilization. My closed card reported with / as low utilization. It also reports / is categorized a bit differently as a closed card vs the open cards, in the TU notifications.

 

I don't know what you're saying, but this account had approximately 40% utilization 2 days ago but now has 100% utilization on TU and EQ. 

What I am saying is, the expected result of closing an account with a lower utilization is that the credit limit can be the same in the Closed status. In the case of my old Citi cards, they kept the limit reporting after I closed the accounts, and kept paying them down. So they ended up at quite low utilization prior to final pay off. If a cardholder closes an account at high utilization, we'd expect that card to report as Closed with high utilizational. In your case, it is the unfortunate confluence where the account gets reported as closed, and at least initially, the credit limit is brought down to that open amount, appearing to be 100%.

 

I don't think anyone says this cannot happen, that the account goes immediately to "Closed 100% utilization" only that going directly to 100% utilization on a closed account is not the default expectation when an account is closed.

 

Some folks may be unfortunate to have a low-balance, low utilization card closed, and then the bank balance chases, lowering the credit limit to force it into a "high utilization" appearance. But this is the same scenario as closing a high utilization card; the high utilization is due to the relation of the card balance to the allowed lowered credit limit. 

 

My credit history is perfect; there was no balance chasing here. It was simply the end of the draw period as per the loan terms.

Balance chasing is used as an example of what might happen, in the pantheon of possibilities. Not intended to be an explanation for your specific situation.

 

Other folks may be in the unfortunate situation of closing an account with a low balance, and a healthy credit limit, then the bank decides to just report the closed balance and same limit. 

 

There's also the question of how exactly a "closed revolving account" is included in the mix of a cardholders entire portfolio, whether it is included in the utilization with open cards or not included in the true open card utilization measures, and merely tracked for payments on time history. I am in the camp that think closed cards, with regard to utilization, are not part of a cardholders open revolving account utilization metrics. I may be alone in that campsite. 

 

The balances are part of the aggregate utilization calculation but the limits are excluded

This kinda doesn't make any sense. If this were true, it would raise your utilization without corresponding limit, which really goes against experience with NPSL cards, that also do not have limits but are excluded from utilization percentages.... because they don't have a limit reported.


 


 

High Bal Jan 2009 $116k on $146k limits 80% Util.
Oct 2014 $46k on $127k 36% util EQ 722 TU 727 EX 727
April 2018 $18k on $344k 5% util EQ 806 TU 810 EX 812
Jan 2019 $7.6k on $360k EQ 832 TU 839 EX 831
March 2021 $33k on $312k EQ 796 TU 798 EX 801
May 2021 Paid all Installments and Mortgages, one new Mortgage EQ 761 TY 774 EX 777
April 2022 EQ=811 TU=807 EX=805 - TU VS 3.0 765
Message 11 of 14
SouthJamaica
Mega Contributor

Re: Closed PLOC with balance reporting 100% utilized


@NRB525 wrote:

@SouthJamaica wrote:

@NRB525 wrote:

Wow, so many questions. 

 

Are you going to leave it as 100% and not pay it off? ( rhetorical question )

Of course I'm going to pay it off ASAP.

Yes, I figured you might Smiley Happy

How long has it been since it converted to a required pay down?

A month.

Hmmm, so perhaps some other changes to the reporting may turn up?

You're sure Santander is not going to pick it up, or create an open "time payment" account to record future payments?

Not sure what you mean. Santander has never said to me that the account would be closed or is closed. They simply said it was leaving the "draw" phase and would be in a 5-year "repayment" phase.

Again, I'd be waiting to see if they sort something else out on their end, to send to the bureaus.

What is the credit product description that is now on your credit reports for this account?

Line of credit; listed under revolving accounts.

When TU reports balance changes on MyFIOC, what balance total does it use for "Total Revolving Accounts" vs "Total Credit Card Accounts" balances? Can you reconcile where this account fits in the mix of "Type of Account" totals that TU routinely provides in the MyFICO Notifications? 

Yes it's in total revolving accounts.

I don't think there is any debate whether an account can be closed with, and thus report as, 100% utilized when closed. If the account is truly 100% utilized, that is the correct reporting to the bureau when it is closed. 

Well you say there is no debate, but there are people in this forum who have claimed that that does not happen.

 

What is in debate is, if an account is closed with low utilization, as the few thousand I had on a several thousand card limit, then when I paid it down to a few hundred, it still reported the same several thousands limit. In that case my closed card was a low utilization closed card in the overall mix of cards, some with higher utilization. My closed card reported with / as low utilization. It also reports / is categorized a bit differently as a closed card vs the open cards, in the TU notifications.

 

I don't know what you're saying, but this account had approximately 40% utilization 2 days ago but now has 100% utilization on TU and EQ. 

What I am saying is, the expected result of closing an account with a lower utilization is that the credit limit can be the same in the Closed status. In the case of my old Citi cards, they kept the limit reporting after I closed the accounts, and kept paying them down. So they ended up at quite low utilization prior to final pay off. If a cardholder closes an account at high utilization, we'd expect that card to report as Closed with high utilizational. In your case, it is the unfortunate confluence where the account gets reported as closed, and at least initially, the credit limit is brought down to that open amount, appearing to be 100%.

 

I don't think anyone says this cannot happen, that the account goes immediately to "Closed 100% utilization" only that going directly to 100% utilization on a closed account is not the default expectation when an account is closed.

 

Some folks may be unfortunate to have a low-balance, low utilization card closed, and then the bank balance chases, lowering the credit limit to force it into a "high utilization" appearance. But this is the same scenario as closing a high utilization card; the high utilization is due to the relation of the card balance to the allowed lowered credit limit. 

 

My credit history is perfect; there was no balance chasing here. It was simply the end of the draw period as per the loan terms.

Balance chasing is used as an example of what might happen, in the pantheon of possibilities. Not intended to be an explanation for your specific situation.

 

Other folks may be in the unfortunate situation of closing an account with a low balance, and a healthy credit limit, then the bank decides to just report the closed balance and same limit. 

 

There's also the question of how exactly a "closed revolving account" is included in the mix of a cardholders entire portfolio, whether it is included in the utilization with open cards or not included in the true open card utilization measures, and merely tracked for payments on time history. I am in the camp that think closed cards, with regard to utilization, are not part of a cardholders open revolving account utilization metrics. I may be alone in that campsite. 

 

The balances are part of the aggregate utilization calculation but the limits are excluded

This kinda doesn't make any sense. If this were true, it would raise your utilization without corresponding limit, which really goes against experience with NPSL cards, that also do not have limits but are excluded from utilization percentages.... because they don't have a limit reported.


 


 


A year ago I had a credit card account that was closed by the bank with a sizable 0 % promotional balance in place.  Because of the zero interest factor, I paid it down slowly over a period of 6 months or so.  I figured this would answer the question for me as to how closed accounts are treated. The account was a big one for me. 40k limit, over 10k balance, so I figured it would be easy to see how it's being treated.

 

The limit was no longer included in my aggregate revolving utilization.

 

The balance continued to be included in my aggregate revolving utilization.

 


Total revolving limits 689000 (587000 reporting) FICO 8: EQ 715 TU 712 EX 695

Message 12 of 14
Revelate
Moderator Emeritus

Re: Closed PLOC with balance reporting 100% utilized


@SouthJamaica wrote:

@Revelate wrote:

On EX's service if the closed PLOC is updated correctly than the scores after that already are reflecting it.

 

100% utilization on a tradeline is a ding from most anecdotal reports; sounds like the closed tradeline may be excluded from revolving utilization metrics?


EX is not reporting it as a closed tradeline. So far EX is reporting it the same way it was previously reported, as an open account with a credit limit and a balance, with the only change being the addition of a comment : "Credit line no longer available - in repayment phase".


I think that's the way many traditional HELOCs report (with a draw vs. repayment phase); admittedly not all HELOCs are structured that way but I don't think that's an uncommon thing.

 

I'm doing some experimenting with a dumbass (my being the dumbass) account during COVID which I forgot about and the creditor charged it off after a year.  I'm pretty sure I can get it removed, need to call them tomorrow, but as soon as these most recent Chase cards reflect their balances I'm going to zero them all out and it should just be the closed tradeline with non-zero balance and see if I get a revolving utilization number or not.




        
Message 13 of 14
SouthJamaica
Mega Contributor

Re: Closed PLOC with balance reporting 100% utilized

1/6/22 Update:

 

I pulled my 3 bureau report today, and it is unclear to me whether the PLOC is being reported as open or closed.

 

in EQ and TU there is a "closed date", while there is no closed date in EX.

 

Across all 3 bureaus it has the comment, "Credit line no longer available – in repayment phase".

 

 

 

 


Total revolving limits 689000 (587000 reporting) FICO 8: EQ 715 TU 712 EX 695

Message 14 of 14
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