closed account balance - how much?

Discussion in 'Credit Talk' started by DanS, Sep 17, 2003.

  1. DanS

    DanS Well-Known Member

    I'm attempting to get all my balances to better ratios - below 30% by year's end.

    The one thing I can't figure out is what to do w/my Nextcard balance of $4,000 - leave it, pay half, all or..??

    How will that balance be looked at for my FICO score - IOW, is the $4k added to the other balances and since there's no limit, always brings the ratio up?

    GEORGE Well-Known Member

    NEXT CARD since it went have NO CREDIT LIMIT against the $4,000 SO IT HURTS YOUR SCORE
  3. J. Vick 71

    J. Vick 71 Well-Known Member

    From what I have ever seen on reports with a closed credit card, the credit limit is still reported even after the account is closed with a balance.
  4. DanS

    DanS Well-Known Member

    Re: closed account balance - how mu

    The account is being reported as closed (by me), the limit is listed as $6k *or* the high balance is $5k (ala Cap1)

    So, there is the theoretical CL of $6,000 but since the account is closed, the CL is zero.

    In the case of my other accounts, it's very obvious how to apply payments so I can show a 29% ratio. If I had $4k to toss around, I'd love to pay off the whole thing, but I'd like to apply whatever is needed to raise my score.

    Any FICO trivia freaks got some info here?
  5. J. Vick 71

    J. Vick 71 Well-Known Member

    Re: Re: closed account balance - how mu

    If anyone here is more of a FICO triva freak than me let me know or tell me I am wrong here.

    The credit limit on the account listed is on your report and it should say and stay what it was when you closed the account.

    The balance on a closed account is usually considered in the FICO debt/credit limit but the credit limit does not help at all.

    Your credit limits are usually your open accounts never the closed ones according to FICO. Look at it this way. You cannot change your credit limits on your open accounts unless you get them raised. You can not change the balances unless you pay them.

    Avalible credit on open accounts = x

    Balances = y

    Divide the 2

    You can only change the balance and it doesn't matter who owns it. x/y=z

    Your open credit limits are set, it doesn't matter who you owe it to. Well actually it does on overall accounts if they are really spread but that is a different subject. You know have 10 accounts, owe $10 on each or $100 on one.
  6. DanS

    DanS Well-Known Member

    Re: Re: closed account balance - ho

    IOW, I should pay off the entire balance, or as much as I can, since it will always count against me.

    Interestingly, the "what if" score calculator using doesn't list individual accounts, just the total balance and then you can "set" a new balance and see the possible outcome.

    This account has been an albatross for so long, I'd love to pay it off. Wish I had a reasonable BT option..
  7. DanS

    DanS Well-Known Member

    final word on this account

    I called and on a $4k balance, got an offer of $3200 to settle. It would not be as favorable on my CR, so I decided to pay in full.

    Free at last !!

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