[turtle777]

Originally Posted by olePigeon 

My credit score went down when I closed my secure credit card, which is impossible to have an unpaid balance on.

Coincidence ?
There are so many factors, incl. daily balance changes and inquiries.

-t

[Doofy]

I generally zero my credit card on the same day that anything's gone on it. Yet they still keep bumping up my credit limit.

[ort888]

Originally Posted by The Final Dakar 

Adama is a cylon.

[turtle777]

Originally Posted by Doofy 

I generally zero my credit card on the same day that anything's gone on it. Yet they still keep bumping up my credit limit.

Gosh, that's too tedious for me.

-t

[Doofy]

Originally Posted by turtle777 

Gosh, that's too tedious for me.

A good Ferengi checks his profits hourly.

[turtle777]

Originally Posted by Doofy 

A good Ferengi checks his profits hourly.

I thought you were a musician

-t

[Doofy]

Originally Posted by turtle777 

I thought you were a musician

It's hard working two jobs. Musician and capitalist peeg.
I could perhaps have pushed that to three jobs, but I think the misanthropy is still at the hobby stage.

[Big Mac]

Originally Posted by olePigeon 

My credit score went down when I closed my secure credit card, which is impossible to have an unpaid balance on.

If that was your first credit account, closing it would have a negative impact on your score - that's well known.

[turtle777]

Originally Posted by Big Mac 

If that was your first credit account, closing it would have a negative impact on your score - that's well known.

Oh, yes, Big Mac is right.

Generally, if your total available credit goes down significantly, it will negatively affect your FICO score.
But if one card out of many gets closed, the effect should be negligible.

Generally, closing an account would have 0 impact if you got a balance increase for the same amount with a different card. And it doesn't matter *why* the account was closed (i.e. no difference if you or the bank closed it).

-t

[Oisín]

Originally Posted by Doofy 

It's hard working two jobs. Musician and capitalist peeg.
I could perhaps have pushed that to three jobs, but I think the misanthropy is still at the hobby stage.

There would be something ironically amusing about the government taxing you for misanthropy, though.

(I just applied for my first-ever credit card about a week ago. Not that I plan on using it, it’s mostly for travel security.)

[Art Vandelay]

Originally Posted by turtle777 

Oh, yes, Big Mac is right.

Generally, if your total available credit goes down significantly, it will negatively affect your FICO score.
But if one card out of many gets closed, the effect should be negligible.

Generally, closing an account would have 0 impact if you got a balance increase for the same amount with a different card. And it doesn't matter *why* the account was closed (i.e. no difference if you or the bank closed it).

-t

Not completely true. If you have one account with 20 years of history and all your others are only 5 years old, then closing that 20 year old account will have quite the impact on your score regardless of credit increases on the others. History is a major factor in addition to the debt to available credit ratio.

[olePigeon]

Originally Posted by Big Mac 

If that was your first credit account, closing it would have a negative impact on your score - that's well known.

I didn't know that, neither did Wamu when I asked them specifically if this would negatively affect me. The only reason I got the secure card was to build my credit so I could get a normal credit card.

[turtle777]

Originally Posted by Art Vandelay 

Not completely true. If you have one account with 20 years of history and all your others are only 5 years old, then closing that 20 year old account will have quite the impact on your score regardless of credit increases on the others. History is a major factor in addition to the debt to available credit ratio.

True, but history is only a smaller factor, not a major factor. It accounts for 15% of your score.

The first 35% of the FICO score calculation is your payment history. This looks at how well you do paying your bills on time. This is the largest part of the FICO score calculation and looks specifically at any late payments you might have. It looks how frequent you pay late, how late were you in paying, and how long has it been since you have paid late.

The next 30% of the FICO score calculation is how much you owe. This is found by dividing your balances by your credit limits. This is done with each account and you also have a total utilization.

The next 15% of the FICO score calculation is your credit history. This looks at the average age of all your accounts and the age of your oldest account. The longer the history the better.

The next 10% of the FICO score calculation is your applications for credit. This looks at your credit report to see how many times you have applied for new credit.

The last 10% of the FICO score calculation is your credit mix. This looks at all your accounts to see what types of credit you are using. People want to achieve a healthy mix of credit.

FICO score calculation, FICO formula, calculating FICO scores | Financially Tough

-t

[Uncle Skeleton]

Originally Posted by osiris 

Well, that was my accountant's wording. It may or may not be true, but he explained that the creditor may not properly explain why the account was closed, thus leaving an exposed question mark on your report. When other creditors or new creditors see this, is raises an unanswered question. Unanswered questions are bad.

It's possible that in the future (or the past), the "closed by grantor" mark would be considered negative. But right now it is not. The mark is so incredibly common anyway, that it can't put you at a disadvantage in the foreseeable future.

One possibility I might foresee is if credit cards become much less common than they are now (for example if issuers eliminate grace periods and no-fee cards and smart people stop using them), then it would change the playing field and new factors would become dominant...

[Uncle Skeleton]

Originally Posted by KCrosbie 

That's usually why they have fees on checking accounts. I've never heard of a bank closing an account due to inactivity. I don't even think they can legally close it unless it's due to account abuse or fraud.

I have, and it even happened to me on my 0-balance Wamu accounts after they became Chase. All the ones I hadn't used since the takeover disappeared a few months ago. It saved me the trouble of doing it myself.

[osiris]

Originally Posted by Uncle Skeleton 

It's possible that in the future (or the past), the "closed by grantor" mark would be considered negative. But right now it is not. The mark is so incredibly common anyway, that it can't put you at a disadvantage in the foreseeable future.

On second thought, that sounds credible under the current economic situation.

Originally Posted by Uncle Skeleton 

One possibility I might foresee is if credit cards become much less common than they are now (for example if issuers eliminate grace periods and no-fee cards and smart people stop using them), then it would change the playing field and new factors would become dominant...

This I believe is the heart of the problem. At one time in history, unsecured credit was difficult to obtain. I can't imagine reverting back to that, considering how easy it is for "banks" to obtain low interest sources of money, and the ability to loan multiples of that at exorbitant rates to the masses. It's like a casino, only better. If people just stop using the cards, sans charge cards like AMEX, maybe the rules will change. But we live in a greedy world...

[olePigeon]

Originally Posted by Uncle Skeleton 

One possibility I might foresee is if credit cards become much less common than they are now (for example if issuers eliminate grace periods and no-fee cards and smart people stop using them), then it would change the playing field and new factors would become dominant...

Reminds me of one of the most unintentionally funny scenes in Trading Spaces. Danny Aykroyd's character holds up a Visa Gold Card, Visa Platinum Card, American Express Gold Card, then asks, "You don't think they give these out to just anyone, do you?"