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Bank closed my credit card
- Thread starter Zorro
- Start date
Red Squirrel
No Lifer
Wow, I hear all these crazy stories. Have banks in the US gone insane? They're just cutting off people's credit cards, accounts left and right.
Question is, did you have money on it that you owed? If not, and if it does screw your credit, I would try to look at options on fighting that. Probably not much though.
Question is, did you have money on it that you owed? If not, and if it does screw your credit, I would try to look at options on fighting that. Probably not much though.
Scarpozzi
Lifer
The only time something has a negative impact on your credit is when it gets reported to the Credit Bureaus. Therefore, simply closing an account will not be reported as *negative* and won't bring your credit score down.
When you open a line of credit, it counts as a liability and since you only make x dollars, the ratio of credit available to you versus your income can bring the number down slightly. This is why it isn't wise to open a lot of credit accounts and close them. The more credit you have available for your set income, the higher risk you are to lenders.
Unless you're trying to apply for a mortgage, I wouldn't worry about it. It will be off your records over the course of the next couple of years... Most closed accounts have to remain closed for a set amount of time before they drop off...I'm not sure if it's the same for Equifax, Experian, and Transunion....but 5 years seems like a good guess.
When you open a line of credit, it counts as a liability and since you only make x dollars, the ratio of credit available to you versus your income can bring the number down slightly. This is why it isn't wise to open a lot of credit accounts and close them. The more credit you have available for your set income, the higher risk you are to lenders.
Unless you're trying to apply for a mortgage, I wouldn't worry about it. It will be off your records over the course of the next couple of years... Most closed accounts have to remain closed for a set amount of time before they drop off...I'm not sure if it's the same for Equifax, Experian, and Transunion....but 5 years seems like a good guess.
chusteczka
Diamond Member
Considering that nobody knows how credit scores are calculated, nobody can truthfully answer your question. Not even the self-righteous correcting the "experts" crawling out of the woodwork.
Brainonska511
Lifer
Why is it insane? They're cutting the unnecessary risk they are carrying to make their books more sound.
Oh the irony.
The reason it will hurt your score is because you have had it so long. Closing it will make the average age of your open credit lower.
Having high limits does not get you high credit scores. Keeping it below the 30% and 50% ratios is what gives you high credit.
A person with a credit card with a limit of $20, but only a $2 balance, will have a higher credit score than a person with a $10,000 limit and a $9500 balance. (Assuming that is all they have on thier report)
chusteczka
Diamond Member
That is probably the most logical statement I have ever heard concerning credit and credit scores. :thumbsup:
Saga
Banned
This statement is absolutely as ignorant as saying nobody knows the speed limit of Highway 75 in the midwest, or nobody knows the active ingredients in Tylenol. There is a process, calculation, law, or regulation for everything effecting your daily life as a typical consumer whore; up to and including FICO. Just because you do not know how it is calculated is no reason to erroneously state that nobody does.
Poop. I'm feeding the trolls again. =(
Red Squirrel
No Lifer
They should at least get the customer's consent before cutting the service. I have a credit card I hardly use, other then for domains and hosting. I would be pretty pissed if my bank randomly cut it out and the way I find out is because my server is down.
Brainonska511
Lifer
Consent? It's the bank is the one providing the service, the one carrying all the risk, and the one writing the contract. It is subject to change at any time and they can stop providing the service should they choose. Read the terms of service that was provided to you when you got the credit card.
boomhower
Diamond Member
The back closing it instead of you has no bearing on your credit score. If you carry balances on other cards then will have a negative impact as you utilization perceantage will increase. It can also be nagatively impacted if it was one of your older cards as it will bring your average account age down.
Saga: While the logic of having a bunch of credit can be a negative, in the real world that isn't how it works, at least as far credit scores are concerned. Under a manual review for a mortage they may see it differently but as far as your FICO goes, the higher the credit limit the better.
Saga: While the logic of having a bunch of credit can be a negative, in the real world that isn't how it works, at least as far credit scores are concerned. Under a manual review for a mortage they may see it differently but as far as your FICO goes, the higher the credit limit the better.
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