How is it I close an account, with 0 balance and score drops 8 points. Now I know some will say about mix, uti etc.....I have 2 NFCU cards with 10k limit, QS card with 2300 limit and a merrick back card with 1200 limit. my uti is 9 percent total. Have an open auto loan with Ford motor credit so and also a walmar and khols card so my mix is pretty good as well as my uti. So why is my score dropping. Im sure there is some wacky formula but just feels wrong to think your doing well and scores drop...just my vent for the day
it was a relatively new card
@MarineVietVet wrote:
@dledo wrote:How is it I close an account, with 0 balance and score drops 8 points. Now I know some will say about mix, uti etc.....I have 2 NFCU cards with 10k limit, QS card with 2300 limit and a merrick back card with 1200 limit. my uti is 9 percent total. Have an open auto loan with Ford motor credit so and also a walmar and khols card so my mix is pretty good as well as my uti. So why is my score dropping. Im sure there is some wacky formula but just feels wrong to think your doing well and scores drop...just my vent for the day
The score drop might not even be caused by the closed account. Something else might have changed in your reports.
Closing a CC account won't affect your AAoA; at least not for awhile. The closed account will continue to report for generally 10 years after closing which helps your AAoA for that time.
The drop though could be caused by higher utilization. Closing the account means you lose whatever credit limit you had on that particular card and if carrying balances on other cards that will raise your overall utilization.
For example if you had total CL's of $10,000 and total balances of $5,000 before closing this account the overall utilization would be 50% ($5,000/$10,000).
If the closed account had a CL of say $1,000 that would drop your available credit to $9,000 but the total balances would remain at $5,000. That would result in an increase of overall utilization to about 56% ($5,000/$9,000).
So I would look at utilization closely as one possible cause of the score drop.
that went from 8 dollar ballance to 0 and paid/closed account
OP, what are your MyFICO scores? What were they 6 months and a year ago?
Hey NRB my scoures were mid to 500's 6 months ago now all are mid to high 600's. As far as the UTI goes, i would not think an 8 dollar drop with do anything as far as UTI goes having 26k credit limit with a 9 percent uti total
@dledo wrote:Hey NRB my scoures were mid to 500's 6 months ago now all are mid to high 600's. As far as the UTI goes, i would not think an 8 dollar drop with do anything as far as UTI goes having 26k credit limit with a 9 percent uti total
First, congratulations on the ~100 point improvement in 6 months. That is a large increase, no doubt the result of clearing up some or several baddies on your file.
And as a result, my next suggestion is going to be that your FICO score is still trying to digest all those changes. You've had a massive rapid increase, and now the score is just working through some more noise calculations as it gets used to the new profile.
The direction is up, and that is the main thing. With more time, your score will resume the increases.
Good luck!