Closing an Account

[Anonymous]

I had a no interest 6 month financing for a fitness equipment that has been paid off over a year and half ago, but it is still reporting as an open account on my credit report. Is there any effect of closing this account for my credit report?

I am new to the forum, so please let me know if other info is necessary for an answer. Thanks in advance!

[SouthJamaica]

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@Anonymous wrote:

I had a no interest 6 month financing for a fitness equipment that has been paid off over a year and half ago, but it is still reporting as an open account on my credit report. Is there any effect of closing this account for my credit report?

I am new to the forum, so please let me know if other info is necessary for an answer. Thanks in advance!

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Is it showing as revolving or installment?

Is it showing a balance? If so how much of the original amount?

[Anonymous]

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@SouthJamaica wrote:

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@Anonymous wrote:

I had a no interest 6 month financing for a fitness equipment that has been paid off over a year and half ago, but it is still reporting as an open account on my credit report. Is there any effect of closing this account for my credit report?

I am new to the forum, so please let me know if other info is necessary for an answer. Thanks in advance!

---

Is it showing as revolving or installment?

Is it showing a balance? If so how much of the original amount?

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On EQ it's reporting as revolving, I believe, and on EX and TU, I'm not too sure. There is no balance being reported.

Equifax

Payment Status:Paid

Balance:$0.00

Date Open:12/04/2014

Last Updated:05/31/2015

Account StatusOpen

Terms:M

Ownership:Individual Account

Original Creditor:-

Company Sold-to:-

Credit Limit:$750.00

Monthly Payment:$56.00

Past Due Amount:-

High Balance:$1,390.00

Balloon Payment:-

Experian

Payment Status:Paid

Balance:$0.00

Date Open:12/01/2014

Last Updated:05/01/2015

Account StatusOpen

Terms:Unknown

Ownership:Individual

Original Creditor:-

Company Sold-to:-

Credit Limit:-

Monthly Payment:$56.00

Past Due Amount:-

High Balance:-

Balloon Payment:-

Comments: -

TransUnion

Payment Status:Paid

Balance:$0.00

Date Open:12/04/2014

Last Updated:05/31/2015

Account StatusOpen

Terms:-

Ownership:Individual account

Original Creditor:-

Company Sold-to:-

Credit Limit:$750.00

Monthly Payment:-

Past Due Amount:-

High Balance:$1,390.00

Balloon Payment:-

Comments: -

[newhis]

I don't think that closing will change your report much, only to drop it after up to 10 years.

I have other questions, how can TU and EQ report a limit of $750 and high balance as $1,390?

Is that bad on a review?

EX always report Month and Year, using 01 as day?

I'm just looking at a credit report for all 3 and EX is always "open date: MM/01/YYYY"

[Anonymous]

Closing it will not affect your average age of accounts, so that's probably a fine decision.  The only exception would be if it were being classified as revolving and you had no other open revolving accounts.  Do you have any credit cards?  How many?

You describe it as a "financing" account that was opened for you by the merchant to encourage you to buy some fitness equipment.  You could replace "fitness equipment" with lots of other phrases (e.g. a sofa at Rooms-To-Go, a computer at Dell, a washer/dryer or big screen TV at Best Buy, etc. etc.) and you'd have the same kind of offer.  This kind of "financing" is often administered by a lender called a Finance Company.  If the account is recognized/categorized by the credit bureau as a finance company account, it will actually hurt your credit score, even if you make perfect payments on it.  In this sense, an FC account is very different from other accounts, where their presence (given responsible payments) makes you look good.  FC accounts make you look bad.

This particular account may not be being detected by FICO as an FC account, which would be great.  But as a general policy for the future, you should avoid doing anything like this again.  I give many similar examples of FC-style situations above.  It's not hard to guess when you might be opening an FC account.  A good way to avoid doing it is to never buy stuff that you couldn't in principle pay for with a debit card if you had to.  I.e. only buy things if you have money in the bank right then to pay for it.  With the exception of a car or house.

[newhis]

I didn't know about the FC accounts.

Thank you

[Anonymous]

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@Anonymous wrote:

Closing it will not affect your average age of accounts, so that's probably a fine decision.  The only exception would be if it were being classified as revolving and you had no other open revolving accounts.  Do you have any credit cards?  How many?

You describe it as a "financing" account that was opened for you by the merchant to encourage you to buy some fitness equipment.  You could replace "fitness equipment" with lots of other phrases (e.g. a sofa at Rooms-To-Go, a computer at Dell, a washer/dryer or big screen TV at Best Buy, etc. etc.) and you'd have the same kind of offer.  This kind of "financing" is often administered by a lender called a Finance Company.  If the account is recognized/categorized by the credit bureau as a finance company account, it will actually hurt your credit score, even if you make perfect payments on it.  In this sense, an FC account is very different from other accounts, where their presence (given responsible payments) makes you look good.  FC accounts make you look bad.

This particular account may not be being detected by FICO as an FC account, which would be great.  But as a general policy for the future, you should avoid doing anything like this again.  I give many similar examples of FC-style situations above.  It's not hard to guess when you might be opening an FC account.  A good way to avoid doing it is to never buy stuff that you couldn't in principle pay for with a debit card if you had to.  I.e. only buy things if you have money in the bank right then to pay for it.  With the exception of a car or house.

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Thank you for the explanation. I do have 5 other credit cards, so I guess I will be good to go ahead and close it. Lesson learned not to apply for any of these in the future.

To the other poster above, I was surprised that they reported a credit limit for less than the financed amount as well, but they never mentioned it at the time of approval. I only found out when I checked my credit report.

Thanks everyone!

[SouthJamaica]

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@Anonymous wrote:

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@SouthJamaica wrote:

---

@Anonymous wrote:

I had a no interest 6 month financing for a fitness equipment that has been paid off over a year and half ago, but it is still reporting as an open account on my credit report. Is there any effect of closing this account for my credit report?

I am new to the forum, so please let me know if other info is necessary for an answer. Thanks in advance!

---

Is it showing as revolving or installment?

Is it showing a balance? If so how much of the original amount?

---

On EQ it's reporting as revolving, I believe, and on EX and TU, I'm not too sure. There is no balance being reported.

Equifax

Payment Status:Paid

Balance:$0.00

Date Open:12/04/2014

Last Updated:05/31/2015

Account StatusOpen

Terms:M

Ownership:Individual Account

Original Creditor:-

Company Sold-to:-

Credit Limit:$750.00

Monthly Payment:$56.00

Past Due Amount:-

High Balance:$1,390.00

Balloon Payment:-

Experian

Payment Status:Paid

Balance:$0.00

Date Open:12/01/2014

Last Updated:05/01/2015

Account StatusOpen

Terms:Unknown

Ownership:Individual

Original Creditor:-

Company Sold-to:-

Credit Limit:-

Monthly Payment:$56.00

Past Due Amount:-

High Balance:-

Balloon Payment:-

Comments: -

TransUnion

Payment Status:Paid

Balance:$0.00

Date Open:12/04/2014

Last Updated:05/31/2015

Account StatusOpen

Terms:-

Ownership:Individual account

Original Creditor:-

Company Sold-to:-

Credit Limit:$750.00

Monthly Payment:-

Past Due Amount:-

High Balance:$1,390.00

Balloon Payment:-

Comments: -

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I doubt that closing it will have any effect one way or the other.