Is the "never close an account" thing ALWAYS true?

Anonymous · ‎07-19-2009

I have Citibank Identity monitor. One of the features is a "scenario builder" that lets you estimate your credit scores based on your hypothetical actions.

I always thought closing accounts would hurt my score, so I've left all my accounts open. But I just tried the scenario builder, and it is saying the opposite, for me at least. I mentioned this in another thread, and many seem to think that the scenario can't be true. I'll post it here, so you can see it for yourself.

Do you all think this is wrong? I set it to close 3 of my highest debt accounts, and my score went up 31 points (Equifax scenario.... I didn't try Transunion or Experian... But I could).

Here are the results of this scenario:

So, do you think this is wrong? I REALLY WANT TO CLOSE THESE ACCOUNTS! If this is a plausable outcome, I'll do it ASAP.

Thanks for any input!

Message Edited by bogfrog on 07-19-2009 11:30 AM

pattycake · ‎07-19-2009

From the scenario you posted (which takes into account a FAKO impact), I would say that this would be the wrong action to take. I've learned from these forums that a FAKO scenario is rarely a logical one.

The best course of action would be to pay down your UTIL, which is high. Paying those down and on time will probably impact your FICO score the most. If you close these accounts while they still have balances, your UTIL will be off the charts and decrease your FICO score by more than you'd want.

In most cases, closing accounts is not a good idea. They don't seem to have as much of an impact if their CL's are low and you don't use them much. In other cases, it's a matter of money. I had a Credit One CC that I closed because the limit was low and the company charged an AF and high interest.

pattycake's FICOs: 6/2/10 - TU: 708; EX: ???; EQ: 749

Anonymous · ‎07-19-2009

What is "FAKO"? A way to say fake FICO?

Also, if you look at the 2nd Citi card (third line down)... How much would you estimate closing that card alone could hurt me? (BTW, the "N/A" limit on the first Citi card--2nd line down-- is also about $15600.)

I really want to close that card especially, since they are going to charge me 29.99% interest if I don't opt out!!!!!

llecs · ‎07-19-2009

bogfrog wrote:
What is "FAKO"? A way to say fake FICO?

Also, if you look at the 2nd Citi card (third line down)... How much would you estimate closing that card alone could hurt me? (BTW, the "N/A" limit on the first Citi card--2nd line down-- is also about $15600.)

I really want to close that card especially, since they are going to charge me 29.99% interest if I don't opt out!!!!!

A FAKO is any credit score that is not a FICO score. Ignore the advice and scores from Citimonitor. It's advice can actually hurt your FICO scores.

Closing the card won't hurt your FICO scores now. It will continue to factor into utilization up to the point the balance reads "$0". It will also be removed from your CRs 10 yrs from the date you close it, so score impact would be nil between now and then.

IMO, never ever close a CC w/ a balance. However, if it came to economics, then go for it. But PIF ASAP.

smallfry · ‎07-19-2009

Do not close those accounts.

BungalowMo · ‎07-19-2009

I could understand if the simulator said "pay this down or off", but close? I'm not so sure. How old are the accts? In the big picture...are they newer or older accts related to the others?

BK 7 discharge 06.24.2020 No Fico score at all.

Anonymous · ‎07-19-2009

@BungalowMo wrote:
I could understand if the simulator said "pay this down or off", but close? I'm not so sure. How old are the accts? In the big picture...are they newer or older accts related to the others?

They are pretty old.

The first Citi cards is since 1999.

The other Citi card is since 2002. This is the one I really want to close because of the 29.99% interest rate hike--I just gotta opt-out of this obscenity!!

The Chase ($21k account) is since 2003.

Anonymous · ‎07-19-2009

If you close those accounts it will be a disaster and you will rue the day you ever used a simulator.

You really need to get your UTIL down anyway you can. You are skating on ultra-thin ice!

Anonymous · ‎07-19-2009

@Anonymous wrote:
If you close those accounts it will be a disaster and you will rue the day you ever used a simulator.

You really need to get your UTIL down anyway you can. You are skating on ultra-thin ice!

Ok... Ok... I won't close them all! But what about the citi card that is rate-jacking me to 30%? Should I leave it even leave that open? If I don't opt-out and close that account I'll be out like at least $800 or so in the first year!

With that in mind, should I still leave that account open?

Also, I am paying between $2000 and $3000 toward my accounts each month. I accumulated all this debt during my return to school. I didn't have parents to help me at all.... so I lived off balance transfer checks and part-time work for a long time. I've never been late on a payment in all these years. Now I'm making $75k/year and I'm ready to dig myself out of this hole!!!!!

JoeBJay20 · ‎07-19-2009

@Anonymous wrote:
@Anonymous wrote:
If you close those accounts it will be a disaster and you will rue the day you ever used a simulator.

You really need to get your UTIL down anyway you can. You are skating on ultra-thin ice!
Ok... Ok... I won't close them all! But what about the citi card that is rate-jacking me to 30%? Should I leave it even leave that open? If I don't opt-out and close that account I'll be out like at least $800 or so in the first year!

With that in mind, should I still leave that account open?

Also, I am paying between $2000 and $3000 toward my accounts each month. I accumulated all this debt during my return to school. I didn't have parents to help me at all.... so I lived off balance transfer checks and part-time work for a long time. I've never been late on a payment in all these years. Now I'm making $75k/year and I'm ready to dig myself out of this hole!!!!!

As was noted, your utilization is extremely high, you're pretty much maxed out on every line. I'm willing to wager that your RJ was due in part to current high balances. The accounts you were looking at closing are your three highest CL and balances, closing even one without immediately PIF would shoot your already high utilization over 100%, further inviting AA from other CCC. But as was also noted, if opting out of the RJ is a necessary financial decision (i.e., you could no long afford the payments), then do it and not worry about the FICO ramifications. You said you're paying 2-3k a month in payments, but how much is that payment over your minimum required payment?