Lost 6 points for closed account

[Logan]

I had a Jared Jewlers account that just reported closed and I lost 6 points on Creditkarma. Don't know why it closed but I suspect lack of activity since I used it over 2 years ago for a 0% interest promo, paid it off and never touched it again.

Logan

[Logan]

Just called and they said they close the account after 18 to 24 months of inactivity.

[AngelinaCatHub]

Just called and they said they close the account after 18 to 24 months of inactivity.

Does not seem fair, but 'tis the way it is. Clark Howard always says, don't close one, buy once a year, pay it off and it will stay active. I have a better way, don't get the cards. I once was 820, after bk, I have not checked in years. Got a free check and my credit is 680 and I've done nothing. Just time went by. 'Hub

[Logan]

Does not seem fair, but 'tis the way it is. Clark Howard always says, don't close one, buy once a year, pay it off and it will stay active. I have a better way, don't get the cards. I once was 820, after bk, I have not checked in years. Got a free check and my credit is 680 and I've done nothing. Just time went by. 'Hub

That's great if you don't want to buy a home or get a car loan but I do and have and will.

I don't really care that it closed, I'm just reporting my experience so other will be aware of closing accounts. I'm not quite sure why this would drop my score since I still have other cards and my balances are so low it won't change my utilization and this account as newer than my average of all my accounts.

Logan

I'm headed your way to live very soon. Looking at North Naples.

[IBroke]

I had a Jared Jewlers account that just reported closed and I lost 6 points on Creditkarma.

Hmm, the reason might be Creditkarma. Many of these 3rd party scoring-models factor in things that would be irrelevant for your real FICO. On my credit-monitoring from USAA, I get a scoring-penalty for having cards with low CLs. FICO, however, is only considering utilization. So who knows - maybe you were penalized for having a lower amount of available credit?

[HHM]

Really, you are crying over 6 points. There is no situation in which 6 points matters. Guess what, if you focused more energy on making money, maybe you wouldn't need credit. It is actually possible to save up cash to buy a house, or enough cash for a down payment where your credit wouldn't matter. The real question is how badly you want it?

[Logan]

Really, you are crying over 6 points. There is no situation in which 6 points matters. Guess what, if you focused more energy on making money, maybe you wouldn't need credit. It is actually possible to save up cash to buy a house, or enough cash for a down payment where your credit wouldn't matter. The real question is how badly you want it?

How about reading my opening post--where did you see me cry? I just stated that Jared Jewler's closed my account and creditkarma showed a loss of 6 points.
I am well aware of how to get a mortgage and a drop of 6 points will not matter but having no credit as was suggested will not help me get a loan.
My price range for a home is 400K to 500K--I guarantee I won't be paying cash unless I win the lottery (I don't play the lottery)
Logan

[Logan]

On 12-29-20011 HHM posted: http://www.bkforum.com/showthread.ph...768#post554768 Below is your post--all I need is a 740 FICO yet above you say I don't need credit--Don't you think I would be better off being 'a prime lending candidate' buying a home in my price range?

Nice...800+

I will generally set an expectation that most people will never see 800+ after a BK, but all you need is 740 or better to be solidly a prime lending candidate. Nice to see an 800+ possible.

The reason it is difficult to get 800+ after BK has more to do with credit history longevity than the BK itself. But in any event, good to know and way to go.

Don't worry, I won't do my rant on new car buying

[Amy26]

Wow... I think that was a way harsh response to the OP...are we here to help people or chastise them? As others have said your score may not in fact have gone down 6 points... CreditKarma's scores are not reliable at all. If your score did in fact drop at all, its because you lost the positive history reporting. The good news is the account still factors in to your average age of accounts until it falls off your credit report. I would check your actual FICO to see if it was really impacted.

And to Ibroke, I was a little confused by your statement of "FICO, however, is only considering utilization" because utilization is only 30% of the FICO score from my understanding.

[IBroke]

And to Ibroke, I was a little confused by your statement of "FICO, however, is only considering utilization" because utilization is only 30% of the FICO score from my understanding.

That's true - but that's not what I meant.

I was talking about the situation of the OP. I wanted to point out that FICO doesn't care how much credit (how many Dollars) you have in available credit. Some third party "score suppliers", however, do. Creditkarma might be one of them. FICO considers the utilization on revolving accounts and not the credit-limits (in other words, you get the same FICO if you have a $3 usage on a $300 credit-line or a $300 usage on a $30,000 credit line. The amount doesn't matter - ONLY the utilization and in both cases, it would be 1%). Of course, utilization is only 30%.

If your score did in fact drop at all, its because you lost the positive history reporting. The good news is the account still factors in to your average age of accounts until it falls off your credit report.

And this is what confuses me a bit..

Usually, the the positive history is not lost when a TL is closed.

[Logan]

Wow... I think that was a way harsh response to the OP...are we here to help people or chastise them? As others have said your score may not in fact have gone down 6 points... CreditKarma's scores are not reliable at all. If your score did in fact drop at all, its because you lost the positive history reporting. The good news is the account still factors in to your average age of accounts until it falls off your credit report. I would check your actual FICO to see if it was really impacted.

And to Ibroke, I was a little confused by your statement of "FICO, however, is only considering utilization" because utilization is only 30% of the FICO score from my understanding.

Hi Amy. I'm not concerned about my FICO as I was just posting to educate people to show the possible drop that can occur for closing an account. I would be curious to see if my real FICO has dropped but not enough to pay for it.
Logan

[Amy26]

I know you weren't concerned Logan... just pointing that out.

Ibroke, well the positive history doesn't "go away" but its no longer factored into your score because its closed. You can still see it of course... but it doesn't count. This is why a lot of people will tell you not to let your cards close and to periodically use them. Its better to have it open and zero balance than closed with a zero balance. And thank you for explaining the other part, I see what you meant now.

[IBroke]

I know you weren't concerned Logan... just pointing that out.

Ibroke, well the positive history doesn't "go away" but its no longer factored into your score because its closed. You can still see it of course... but it doesn't count.

That would be news to me...

http://ficoforums.myfico.com/t5/Cred...ds/td-p/347190

"Closed and opened CC TLs are weighed and scored equally by FICO. You will not be punished by simply closing a CC as long as it is in good standing, has a $0 balance and your cumulative Util remains at 1-9 percent. Increasing the CLs (credit limits) on the cards you plan to keep open before you close the card(s) you don't want might be helpful as this too helps to keep your Util percentage low.

Also open and closed accounts age the same. Closing a CC has no affect on average age of accounts or credit history length."

[Amy26]

Well by golly, I was lied to I say! I yeld then... Interesting, thanks for correcting me.

I assume then the only impact would be to available credit and/or utilization.

[IBroke]

Well by golly, I was lied to I say! I yeld then... Interesting, thanks for correcting me.

You're welcome!

I assume then the only impact would be to available credit and/or utilization.

Yup! Some "third party scores" consider the amount of available credit and the utilization - FICO only considers the utilization.