Thread: credit problem after closing accts

Hi:

I recently refinanced and paid the majority of my credit cards and debt off.

I thought this would make my credit gold as all accts were paid, no lates, closed by consumer etc. Instead everywhere I go, I am declined credit. I got my report it shows 42 accounts in good standing, Negative accountw with creditor and others - O

I still have three open accounts. I had a JC Penny card for 10 years, paid in full and closed in October. Denied new card in December?

Is there something I dont know about?

Oh my! They say not to close accounts all at once. See if one of them will re-open the old account for you, instead of applying for new ones.

If you have applied for a lot of accounts lately you probably have generated a lot of hard inquiries on your credit reports. I would wait 90 days from the last time you applied for credit and try to keep the number of hard inquires on each credit report in the last year under around 5.

Thanks, I appreciate it.

Ok I'll wait and see if that helps, but really I was declined on the first attempt to open, so doubt if thats the problem.
thanks

Oh OK. The FICO scoring program must have freaked out because you closed so many accounts. Re opening a couple may be your best option for now. In general it's important to have am open trade (visa, master card, or discover) at least five years old.

Discover told me that when you close an acct w/ them they keep it in some kind of status that allows you to reopen it w/in 90 days. If you closed a discover card maybe you can try to reopen it even if it's been more than 90 days. Can't hurt to ask. From what others have posted it seems like other companies may do this too. I don't remember if you said what your scores are but if you haven't gotten them yet, you might want to see what they are.

Originally posted by lynabarnes
Hi:

I recently refinanced and paid the majority of my credit cards and debt off.

I thought this would make my credit gold as all accts were paid, no lates, closed by consumer etc. Instead everywhere I go, I am declined credit. I got my report it shows 42 accounts in good standing, Negative accountw with creditor and others - O

I still have three open accounts. I had a JC Penny card for 10 years, paid in full and closed in October. Denied new card in December?

Is there something I dont know about?

Sounds like you closed a lot of old accounts causing the average age of your account to go down and your scrore to plummet. FICO likes you to have old accounts with a long history of on time payment.

One reason is that it establishes a pattern Another is profit for the creditor. A lot of accounts open for short periods of time shows someone who hops from card to card chasing the latest BT offer or rewards program. No one wants to give you a 0% loan and have you jump ship to the next creditor.

Originally posted by alent1234


Sounds like you closed a lot of old accounts causing the average age of your account to go down and your scrore to plummet. FICO likes you to have old accounts with a long history of on time payment.

One reason is that it establishes a pattern Another is profit for the creditor. A lot of accounts open for short periods of time shows someone who hops from card to card chasing the latest BT offer or rewards program. No one wants to give you a 0% loan and have you jump ship to the next creditor.

Think of it in profitability terms. By refinancing you took all the profits away from the credit card accounts. You also closed them, which shows that you took away the chance of future profits.

It is also strange that you just closed a lot of accounts and want to open new ones??? Why not just keep the old ones open?

Originally posted by Mecro

It is also strange that you just closed a lot of accounts and want to open new ones??? Why not just keep the old ones open?

Sometimes people do this in the mistaken belief that it won't affect their scores negatively but may actually be good. I have friends w/ defaulted accts who in an attempt to "improve" their credit have closed some of their remaining good accts. If you think about it, you SHOULD have the freedom to open and close accts at will w/o all the ramifications that come w/ it. Unfortunately this is not the case at all. As pointed out, the average age of accts gets lowered and your credit utilization gets higher. In this case, there is probably HUGE utilization b/c it sounds like all the debt is tied to that one loan.