Financial position radically improving and FICO score deteriorating

[Anonymous]

It is a secured credit card that I have had for quite some time. I am in a catch 22. If I close the account, even if I replace it with another card, my AAoA will drop, and thus my scores. And it is not a bad card. Good customer service, never a complaint about the payment history is reported, etc. I apologize in my earlier posts as it was not the interest I was concerned about, but trying to determine what % of util to have as it reports to the credit bureaus. And you answered that very specifically.

Thank you,

John

[creditwherecreditisdue]

---

@Anonymous wrote:

It is a secured credit card that I have had for quite some time. I am in a catch 22. If I close the account, even if I replace it with another card, my AAoA will drop, and thus my scores. And it is not a bad card. Good customer service, never a complaint about the payment history is reported, etc. I apologize in my earlier posts as it was not the interest I was concerned about, but trying to determine what % of util to have as it reports to the credit bureaus. And you answered that very specifically.

Thank you,

John

---

Who issues the card you are speaking of?

[Anonymous]

So in my case, here is what I see.

CC1, no grace period, pay in full each month as I see fit. I use the card regularly so no danger of CC company closing account for non-use.

CC2, has a grace period, so I need to pay account in a manner that reflects a balance of app 1% of Cl when the account reports each month.

However, I am still under the assumption that any account that regularly shows a zero balance IS NOT counted in the score. I was actually told that app. 2 years by Craig Watts, who is with FICO.

[Anonymous]

New Millenium Bank, based out of NJ.

[creditwherecreditisdue]

---

@Anonymous wrote:

So in my case, here is what I see.

CC1, no grace period, pay in full each month as I see fit. I use the card regularly so no danger of CC company closing account for non-use.

CC2, has a grace period, so I need to pay account in a manner that reflects a balance of app 1% of Cl when the account reports each month.

However, I am still under the assumption that any account that regularly shows a zero balance IS NOT counted in the score. I was actually told that app. 2 years by Craig Watts, who is with FICO.

---

An account need not report a balance to remain active. It does need to be used, however. One of my PenFed PCR Visa cards rarely reports a balance, yet it is not dormant:

08/2009   $0 

07/2009   $0
06/2009   $0
05/2009   $0
04/2009   $0
03/2009   $27  <== This was ill timing of a charge posting and not a plan.
02/2009   $0
01/2009   $0
12/2008   $0
11/2008   $0
10/2008   $0
09/2008   $0
08/2008   $0
07/2008   $0
06/2008   $134
05/2008   $82  <== New account.

This Citi account is not dormant either. It has never reported a balance, but is has been used:

08/2009   $0 

07/2009   $0
05/2009   $0
04/2009   $0
03/2009   $0
02/2009   $0
01/2009   $0
12/2008   $0  <== New account.

Message Edited by creditwherecreditisdue on 09-07-2009 03:10 PM

[creditwherecreditisdue]

---

@Anonymous wrote:
New Millenium Bank, based out of NJ.

---

Does this card eventually convert into a regular card offered by a prime issuer? If not you might want to consider obtaining a secured card from a prime issuer that will convert to a regular card after a year or so.

[Anonymous]

They don't offer such products. I don't really want to move to another card, because they folks give exceptional

customer service, and if I close the account, my AAoA would suffer, and thus my scores.

Now, I don't meant to beat a dead horse, but as far as you know, does an account that regularly shows a $0 balance get calculated in the score or not. By regularly, I mean every month continuously for a period of several months. We both know the card is getting used, so no danger of closure from non-use, but because of the way it is paid, and when it reports to the CB's, it always shows a zero balance.

[creditwherecreditisdue]

---

@Anonymous wrote:

They don't offer such products. I don't really want to move to another card, because they folks give exceptional

customer service, and if I close the account, my AAoA would suffer, and thus my scores.

Now, I don't meant to beat a dead horse, but as far as you know, does an account that regularly shows a $0 balance get calculated in the score or not. By regularly, I mean every month continuously for a period of several months. We both know the card is getting used, so no danger of closure from non-use, but because of the way it is paid, and when it reports to the CB's, it always shows a zero balance.

---

This has been asked and answered with examples.

I don't see much future in a secured card that will not convert. You can take an AAoA hit now or later. Your choice.

[llecs]

---

amexorbust wrote:

.....and if I close the account, my AAoA would suffer, and thus my scores.

---

Even if closed, it will continue to report and still factor into your AAoA. It is only removed from AAoA if this TL is removed from your CRs.

[creditwherecreditisdue]

---

@llecs wrote:

---

@Anonymous wrote:

.....and if I close the account, my AAoA would suffer, and thus my scores.

---

Even if closed, it will continue to report and still factor into your AAoA. It is only removed from AAoA if this TL is removed from your CRs.

---

Correct, of course. I believe, however, somewhere back up the line concern was expressed about closing this account and replacing it effecting AAoA, which it would of course do. Were it me I would bite the bullet now for a secured card that would convert.