Confused about score decrease

[Anonymous]

I have an account that was closed by the grantor over a year ago because I was 60 days late on it. I have been paying on it every month for 9 months on time and usually more than the minimum. It has been updating every month with the new balance. It hasn't affected my score in this time (accept maybe just the fact that it is aging) I finally paid it off last month and today I got an alert that the account status changed to "Zero Balance
Account closed by credit grantor" until this month, it said "account closed by credit grantor." This change made my score drop 7 points. I don't understand, why would the last payment on an account like this cause my score to go down. I know that paying off an account that had previously been inactive for a while can cause a score to go down, but since this one showed activity every month, why would the last one cause this??? Also, the status thing seems weird to me. The way it is worded, it seems like the account was closed after the 0 balance, which is maybe why it is affecting my score, but that is not the case, it was already a closed account that I have been paying on. What's the deal?

[llecs]

I take it that this is a CC acct?

If a CC account then I have the answer. If closed with a balance, this card still factored into your utilization. However, once closed and PIF it no longer gets calculated into utilization. If you were to pull your FICO report, you would likely see a higher utilization rate.

[sitfico]

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@llecs wrote:
I take it that this is a CC acct?

If a CC account then I have the answer. If closed with a balance, this card still factored into your utilization. However, once closed and PIF it no longer gets calculated into utilization. If you were to pull your FICO report, you would likely see a higher utilization rate.

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I thought with closed accounts the balance was used for util but not the CL. So wouldn't overall util go down?

[llecs]

Nope. Both the balance and the CL continue to be factored in. Once the balance reaches $0 on a closed account, then the CL is no longer factored in.

[Anonymous]

I understand that the CL will no longer be factored in. I am not sure I stated my second question correctly. Prior to this payment posting, my util was 76% (including that account), once it posted, my utilization became 96%, which was the utilization on my only other revolving account. However, I made a payment on that other account that will bring it down to 73%, so that will be my overall utilization once that payment posts, so why wouldn't my score come back up some? I also plan to make a large payment on the other account this month that will bring it down to under 20%, shouldn't I also expect and increase when that posts?

[llecs]

I have to ask the obvious...you got this from a FICO report, right?

You really wouldn't see any improvements between 96% and 73%. Both are still considered maxed out. However, paying it down below 20% will net you a small increase. BTW, you'll benefit by adding another revolving or store charge card.

I have another idea, but have to check on it first.

[Anonymous]

So I had a 7 point decrease when I went from 76% to 96%, but won't see an increase going from 96% to 73%? That seems unfair...My score went up 10 points today, but the remaining revolving account didn't update, so I am not sure why it went up. I am paying down the remaining revolving account to under 20% this month, about how many points is a "small increase"?

Did you look into your other idea? 

[llecs]

Where are you pulling your scores from?

Message Edited by llecs on 03-09-2009 10:38 PM

[Anonymous]

I am pulling my equifax FICO from this site.

[Junejer]

I personally think that you will get back those points. My bucket may be different from yours, but when I got my util down to, coincidentally, 73%, I got 13 points back. That was, though, with three more CCs reporting a $0 balance.

Edit: addition of 's' to make point plural

Message Edited by ByrdMan on 03-11-2009 10:54 AM