Ok, a couple years back, in a deal worked out with MBNA they closed my account while the balance was $1200--limit was $900. <cough> Since then I have paid the thing down to about $400. The account was not actually charged off, btw, just closed at credit grantors request. The question I've got is, since the account is closed, does anyone know how the remaining balance affects my credit score? I know if the account were open, $400 out of $900 wouldn't be all that bad--but anyone know how do they count this when the account is closed with a balance still owing? The interest on this account is only a couple dollars a month, so I haven't been in a huge hurry to pay it off. However, I've been thinking that maybe I should just go ahead and pay it off if it's going to make a big difference in my score. Any ideas on this? -- cnswift TU: 601 - EXP: 624 - EFX: 619
I, actually asked this question to one of Fair Issac's reps last week. When an account is closed and there is still a balance being reported it affects your score negatively. Since you still owe a balance, but you no longer have any available credit for that particular account. They then take the balance out of your remaining available credit. There is more to it then this, but the rep didn't go into detail. She did tell me to not close an account that there is a balance still remaining on. If you're going to close it wait until you have the balance paid in full. Dani
Wow, that is excellent info, thank you very much! I thought of asking Fair, Isaac... but when I've asked this sort of question in the past, they usually brush me off with a generic "Included in your credit score are four codes for the primary reasons your score is not higher. Please see www.myfico.com for a more thorough explanation of the reason codes." I still say FICO scores are computed by Florida Election Officials. Bah. -- cnswift
You can go to Fair Issiac's web site and email questions. I've done thisa number of times over the past year and always got a response to the specific question.
So a closed account with a balance negativley impacts you. That is nice to know now that I am done closing all my accounts with balances... [Grrrr]. Had to stop them from jacking APRs to ungodly though. Live and learn I guess.
...BUT if you get "JACKED" you have NO choice, but to close it!!! If you have a choice between keeping 9.99% on a closed account, or get "JACKED" to 22.49% and leave it open...I WILL CHOOSE THE LOWER RATE AND LET THEM CLOSE IT!!!
