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Closed PLOC with balance reporting 100% utilized

SouthJamaica
Super Contributor

Closed PLOC with balance reporting 100% utilized

There has been a lot of discussion in this forum as to how a revolving account which is closed, but has a balance, is reported.  This for me puts an end to the debate.

 

I had a $15k PLOC with Santander. It had a "draw" period, in which it behaved like a normal revolving account, where I could "draw" against it and repay it as I saw fit.

 

Then it entered into a "repayment period" in which I could no longer draw against it, but would be required to pay it down with monthly installments.

 

Well in advance of the date on which it was scheduled to convert I asked customer service representatives whether the manner in which it was reported to the credit bureaus would change once the draw period ended.  They assured me it would report the same, and that both the limit and the balance would be reported the same as they did before.

 

Well it hasn't happened that way at all.

 

Santander is now reporting the account as a closed account with a balance, and is reporting that it is 100% utilized and has not been paid down at all.   There is no reference whatsoever to the $15k limit.  Only to the "high balance", for which it is using the current balance.

 

There have been many reports in this forum by people indicating that closed accounts are reported as 100% utilized, maxed out, accounts, with the balance being reported as the limit.

 

And there have been many naysayers who dispute that that can happen.

 

Well I am here to say that it can happen, because it has happened to me.


Total revolving limits 693500 (600500 reporting) FICO 8: EQ 716 TU 729 EX 697

Message 1 of 14
13 REPLIES 13
NRB525
Super Contributor

Re: Closed PLOC with balance reporting 100% utilized

Wow, so many questions. 

 

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

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

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

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

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? 

 

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. 

 

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.

 

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. 

 

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. 

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

Message 2 of 14
SouthJamaica
Super Contributor

Re: Closed PLOC with balance reporting 100% utilized


@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.

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

A month.

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.

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.

 

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.

 

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


 


Total revolving limits 693500 (600500 reporting) FICO 8: EQ 716 TU 729 EX 697

Message 3 of 14
Revelate
Moderator Emeritus

Re: Closed PLOC with balance reporting 100% utilized

So proof being in the pudding, I know you track your scores SJ, what was the result of this tradeline updating to closed and 40->100%?

If I missed it apologies.




        
Message 4 of 14
SouthJamaica
Super Contributor

Re: Closed PLOC with balance reporting 100% utilized


@Revelate wrote:

So proof being in the pudding, I know you track your scores SJ, what was the result of this tradeline updating to closed and 40->100%?

If I missed it apologies.


FICO 8's

EX -26

TU -18

EQ -12

 

Unknown at this point. Sorry for giving you misinformation @Revelate 


Total revolving limits 693500 (600500 reporting) FICO 8: EQ 716 TU 729 EX 697

Message 5 of 14
ByrdMan
Moderator Emeritus

Re: Closed PLOC with balance reporting 100% utilized


@SouthJamaica wrote:

@Revelate wrote:

So proof being in the pudding, I know you track your scores SJ, what was the result of this tradeline updating to closed and 40->100%?

If I missed it apologies.


FICO 8's

EX -26

TU -18

EQ -12


So, I would attribute the majority of your score drop to this (100% util) versus the new account reporting.






Starting Score: 469
Current Score: 809
Goal Score: 825


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Message 6 of 14
SouthJamaica
Super Contributor

Re: Closed PLOC with balance reporting 100% utilized


@ByrdMan wrote:

@SouthJamaica wrote:

@Revelate wrote:

So proof being in the pudding, I know you track your scores SJ, what was the result of this tradeline updating to closed and 40->100%?

If I missed it apologies.


FICO 8's

EX -26

TU -18

EQ -12


So, I would attribute the majority of your score drop to this (100% util) versus the new account reporting.


Sorry @ByrdMan I gave @Revelate the wrong information.  Those score drops were from the addition of a new credit card account.  The 26 point drop in EX was the first shoe to drop, and EX has not reported the Santander account as closed.  EX is updated daily, and the only significant change was the addition of the BECU account.  The point drop is from being booted off of the > 12 month AoYA scoreboard. 


Total revolving limits 693500 (600500 reporting) FICO 8: EQ 716 TU 729 EX 697

Message 7 of 14
SouthJamaica
Super Contributor

Re: Closed PLOC with balance reporting 100% utilized


@SouthJamaica wrote:

@ByrdMan wrote:

@SouthJamaica wrote:

@Revelate wrote:

So proof being in the pudding, I know you track your scores SJ, what was the result of this tradeline updating to closed and 40->100%?

If I missed it apologies.


FICO 8's

EX -26

TU -18

EQ -12


So, I would attribute the majority of your score drop to this (100% util) versus the new account reporting.


No, that's not correct. The 26 point drop in EX was the first shoe to drop, and EX has not reported the Santander account as closed.  EX is updated daily, and the only significant change was the addition of the BECU account.  Trust me, the point drop is from being booted off of the > 12 month AoYA scoreboard.  (Also the point drops here are comparable to what I gained when I first hit the 12 month AoYA threshold).


Oops @ByrdMan you've made me realize I gave @Revelate incorrect information.

 

Sorry about that @Revelate 

 

I misspoke when I attributed those point drops to this Santander thing.  I don't think these have hit the algorithms yet. 

 

The point drops I referenced were all attributable to my being removed from the > 12-month AoYA scoreboard when my new BECU Visa card hit the reports.


Total revolving limits 693500 (600500 reporting) FICO 8: EQ 716 TU 729 EX 697

Message 8 of 14
Revelate
Moderator Emeritus

Re: Closed PLOC with balance reporting 100% utilized

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?




        
Message 9 of 14
SouthJamaica
Super Contributor

Re: Closed PLOC with balance reporting 100% utilized


@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".


Total revolving limits 693500 (600500 reporting) FICO 8: EQ 716 TU 729 EX 697

Message 10 of 14
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