Credit Utilization on a single card.

[Anonymous]

My credit used to suck.  Well it still sucks but it's better.  So I had a bunch of credit cards that I paid off ( in the tune of 40k).  I have 1 account left. This paticular card was cancelled by the bank.  However there is still a balance left on the card.  As the card is cancelled there is no upper limit on the card (meaning the credit limit is whatever the balance is).   So since all my other cards are at $0.00 and this card has a balance with no credit limit is my utilization at 100% AND will it affect my score?  Thx!  score was at 547 now at 692 (yes I know I'm working on it...lol).

[Anonymous]

My comments below in blue.

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@Anonymous wrote:

My credit used to suck.  Well it still sucks but it's better.  So I had a bunch of credit cards that I paid off ( in the tune of 40k).  I have 1 account left.

Were the credit cards that were paid off closed?  Or are they still open?  If they are open, what is your total credit limit on these zero-balance cards?

This paticular card was cancelled by the bank.  

You probably mean closed.  A card can be cancelled (e.g. due to detected fraud or because it was lost) and that 16-digit number gets closed down but your account stays open -- the CC issuer just sends you a card with a new number.  Did you mean closed?

However there is still a balance left on the card.  

What is that balance?  And how long will it take to pay off, do you think?

As the card is cancelled there is no upper limit on the card (meaning the credit limit is whatever the balance is).  

Was the card a true credit card?  (Not a charge card.)  If so, do you have any reports from when it was open that show what the credit limit was before it was closed?  It's important to find out if at one time the bureaus had its true credit limit.  There is mixed opinion here on the forums whether closed credit cards are treated by FICO as if their CL is zero -- some think that is true and so do not.

So since all my other cards are at $0.00 and this card has a balance with no credit limit is my utilization at 100% AND will it affect my score?  Thx!  score was at 547 now at 692 (yes I know I'm working on it...lol).

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[Anonymous]

Thank you for taking the time to post an answer.

Most of the cards were closed.  I have the following:

A charge card for 1500.00 (Balance 0)

2 Credit cards that are open total of 2000.00 (balance 0)

A credit card "closed" by the bank (you are correct).  Balance 1200.  I should take me a month (maybe 2) to pay off.

That's it!  

[Anonymous]

Your total utilization is currently 1200 / 2000 = 60%.  You will see a marked score improvement as you pay that down to zero.  Since you will have that paid off soon I wouldn't worry about it.

Your individual utilization may indeed be 100% as you say on that one card -- that was the received wisdom at one time but recently some people produced some evidence that this might not be soon.  Still as I said above it doesn't matter since you will soon have paid the card to zero anyway.

For the future, do everything you can to protect your three credit cards from being closed (unless one or more of them have an annual fee -- then the issue becomes a bit more complicated).  Using each card every six months (it can be for something small, like $5 worth of groceries) will protect it from being closed.

When all your debt is paid off, make sure that one credit card reports a small positive balance each month.  After you have achieved that, circle back with the people here and they can suggest a simple test to determine whether your "charge" card is being treated by FICO as a true credit card (as it possibly may be).

[Anonymous]

Hmmm, one of the cards does have an annual fee but I think I can deal with it.  The thing that annoys me is I was very good with the card the bank closed..lol.  No late payments at all.  However  I think the bank took a look at my credit profile which was a huge mess (charges offs and collections) and decided to close the account.  That was 7 years ago.  Still again...thank you