Which is better....

[Thomas_Thumb]

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Zebede wrote:

The comments may not be a factor with respect to actual score, but the score isn't everything, right?

If one was borderline, and rather than an instant approval, the application went into one of those 7-10 day, 30 day , or whatever 'We need to further review' message pops up, then the comments could then make a difference, could they not?

As a credit grantor, I'm pretty sure I would be looking at closed accounts too. It's analogous to looking at resumes. Why did you leave your last job? Did you quit ro were you let go?

Did the credit grantor drop you or did you drop them?

And seeing as they probably spend 2-3 minutes 'reviewing' these reports, they probably are not going to look into the whys and hows of why the creditor closed the account, just that they did it. 

I know I'm throwing a lof of 'I think, therefore it must be true' into this, but I guess I am following the principle that if you have a choice, take the route with less chance of it having a negative effect.  

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At the end of the day, it is the items inside the red boxes that actually matters - NOT how the account was closed (purple box). Really not using an account is never a credit risk so not an analogy to not going to work and quitting before getting fired.

[SouthJamaica]

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@Anonymous wrote:

The comments may not be a factor with respect to actual score, but the score isn't everything, right?

If one was borderline, and rather than an instant approval, the application went into one of those 7-10 day, 30 day , or whatever 'We need to further review' message pops up, then the comments could then make a difference, could they not?

As a credit grantor, I'm pretty sure I would be looking at closed accounts too. It's analogous to looking at resumes. Why did you leave your last job? Did you quit ro were you let go?

Did the credit grantor drop you or did you drop them?

And seeing as they probably spend 2-3 minutes 'reviewing' these reports, they probably are not going to look into the whys and hows of why the creditor closed the account, just that they did it. 

I know I'm throwing a lof of 'I think, therefore it must be true' into this, but I guess I am following the principle that if you have a choice, take the route with less chance of it having a negative effect.  

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Agreed

[Anonymous]

@TT

I do understand the point you are making, and I have seen several of your very informative and useful posts, but in this instance, I guess I am not convinced. 

Closed due to inactivity' may be one thing, but 'Closed by Credit Crantor' may be someting else altogether. It could point to AA done in tha past. There have been many many threads where where someone has never been late but had their accoint closed. there is also usually (despite the prostestations in these threads) a reason why the AA occured 

the comments are there to add additional info that perhaps cannot be scored in the traditional manner. 

Additionally, if an applicant had perhaps a few of these 'closed due to inactivity' accounts, I, as a credit grantor, may decide against the expense of opening an accoint for them. Enough eveidence on this very site of people opening up accounts for the sake of raisng their overall CL, perhaps to reduce their util. As a card issuer, that doesnt help me at all unless they actuall use the card. 

[Thomas_Thumb]

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@Anonymous wrote:

@Anonymous

I do understand the point you are making, and I have seen several of your very informative and useful posts, but in this instance, I guess I am not convinced. 

Closed due to inactivity' may be one thing, but 'Closed by Credit Crantor' may be someting else altogether. It could point to AA done in tha past. There have been many many threads where where someone has never been late but had their accoint closed. there is also usually (despite the prostestations in these threads) a reason why the AA occured 

the comments are there to add additional info that perhaps cannot be scored in the traditional manner. 

Additionally, if an applicant had perhaps a few of these 'closed due to inactivity' accounts, I, as a credit grantor, may decide against the expense of opening an accoint for them. Enough eveidence on this very site of people opening up accounts for the sake of raisng their overall CL, perhaps to reduce their util. As a card issuer, that doesnt help me at all unless they actuall use the card. 

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Here is what the OP is asking:

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@Anonymous wrote:

Is it better to close an account yourself, or have it closed for inactivity by the issuer?  Or does it matter?

Trying to help my wife, she has a FingerHut account that is almost paid off but we have no interest in paying more exorbitant prices to keep them reporting.  Is it better to just let it be, reporting open and never late until they finally close for inactivity, or close it preemptively, hurting ratios and account age?

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The answer to OPs question is: It does not matter. I would also recommend maintaining the account open but that's an extension to the question

The question was NOT closed by any other means.

Sorry but I don't see this: "if an applicant had perhaps a few of these 'closed due to inactivity' accounts, I, as a credit grantor, may decide against the expense of opening an accoint for them" as holding water. 

 

[Anonymous]

Still doesnt make sense. Quite aware of what the OP's question was. We're not debating the reason for the account closure. We're discussing what the narrative may say. The article you posted about narratives even states that 'Account closed by credit grantor' is one of the two most common narratives given, with a third 'less common' reason of jsut 'Account closed'. Says nothing about a narrative about inactivity. This would indicate that the credit grantor may just select the more common 'Account Closed by Credit Grantor' narrative, even if it was due to inactivity. 

We know why the account was closed. But if the narrative is not clear, then it is open to interpretation by anyone else reviewing the report. Thishas nothing to do with scoring,we're all agreed that it makes no difference here. 

Based on the information int he article you supplied, we have no way of being certain that the narrative will say 'Account closed due to inactivity' or 'Account Closed by Credit Grantor'.

The question is,  could the narrtive be seen in a negative light? If it says, 'Account Closed by Credit Grantor' , I believe it could be. 

[Thomas_Thumb]

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Zebede wrote:

Still doesnt make sense. Quite aware of what the OP's question was. We're not debating the reason for the account closure. We're discussing what the narrative may say. The article you posted about narratives even states that 'Account closed by credit grantor' is one of the two most common narratives given, with a third 'less common' reason of jsut 'Account closed'. Says nothing about a narrative about inactivity. This would indicate that the credit grantor may just select the more common 'Account Closed by Credit Grantor' narrative, even if it was due to inactivity. 

We know why the account was closed. But if the narrative is not clear, then it is open to interpretation by anyone else reviewing the report. Thishas nothing to do with scoring,we're all agreed that it makes no difference here. 

Based on the information int he article you supplied, we have no way of being certain that the narrative will say 'Account closed due to inactivity' or 'Account Closed by Credit Grantor'.

The question is,  could the narrtive be seen in a negative light? If it says, 'Account Closed by Credit Grantor' , I believe it could be. 

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I presented some real world examples of narrative texts that do get displayed when an account is closed due to inactivity. However, there is no debate on what other narrative variants may relate to "inactivity" will say as that is not the question.

Again, the question was whether it made a difference and whether the account should be kept open. 

I have seen no data supporting a negative associated with allowing accounts to close due to inactivity (other than losing the value of the open account). Conversely, my experience has been accounts closed do to inactivity are viewed in a neutral light same as are accounts closed by consumer, both are benign. 

As the text says: "The narratives which indicate how the account was closed are benign and have no impact on credit score". 

You are imposing hypotheticals that don't appear to be supported by any evidence.

[SouthJamaica]

There is really nothing to debate, T_T.

It seems indisputable that whether or not comments such as "closed by grantor" or "closed by grantor for inactivity"

do or do not have any impact on any particular FICO score in which we are interested, they are visible in a manual review

and might have impact.

It seems likewise indisputable that since at least some older FICO models did take those remarks into account in scoring, there is

always the possibility that (a) some lender might use one of the old models, or (b) some future FICO version might

throw them back into the equation.

So since OP is in a situation where avoiding such a comment is a short phone call or website visit away, there is no

reason in the world for OP to risk the possibility that someone might look askance at the report some day.

There is no basis for advising OP to let the grantor close the account instead of just closing it. So why are we even talking about it?

[Thomas_Thumb]

SJ

Whether the remarks on who closed a credit card account in a manual review adversely impacts credit decisioning is disputable. Likewise, the strategy of gaining aditional age on an inactive account before it is closed due to non use. My basis, in this case,  is influenced by my personal experience.

You made your point, which I respect.

Enough said.

[Anonymous]

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@SouthJamaica wrote:

There is really nothing to debate, T_T.

It seems indisputable that whether or not comments such as "closed by grantor" or "closed by grantor for inactivity"

do or do not have any impact on any particular FICO score in which we are interested, they are visible in a manual review

and might have impact.

It seems likewise indisputable that since at least some older FICO models did take those remarks into account in scoring, there is

always the possibility that (a) some lender might use one of the old models, or (b) some future FICO version might

throw them back into the equation.

So since OP is in a situation where avoiding such a comment is a short phone call or website visit away, there is no

reason in the world for OP to risk the possibility that someone might look askance at the report some day.

There is no basis for advising OP to let the grantor close the account instead of just closing it. So why are we even talking about it?

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You said what I was trying to say much better than I did!