? about Credit score and Credit cards?
by admin ~ December 8th, 2008 . Filed under: Credit .
Confused asked:
I sold my house thru a short sale and I didn’t know exactly how it will affect my credit score. I received a letter from one of my credit card companies stating that they closed my account because of what was written on my Fico score (previously 767) and that it was an inactive card. I still have 2 more accounts with the same credit card company, 1 is active while the other 1 has been dormant for 2 years. I also have 2 more inactive credit cards with other companies. Presently, I don’t have any mortgage or car loans and I pay in full my credit card monthly and on time.
The questions are: Do I need to use and activate all my other credit cards to avoid it from being closed by the credit card companies and how do I improve or at least keep my current Fico score ( which I presume went down already, just checked it on free annual credit report and already showed a negative remark)? Any comment will be greatly appreciated.
Thanks,
Confused
Young Frankenstein
I sold my house thru a short sale and I didn’t know exactly how it will affect my credit score. I received a letter from one of my credit card companies stating that they closed my account because of what was written on my Fico score (previously 767) and that it was an inactive card. I still have 2 more accounts with the same credit card company, 1 is active while the other 1 has been dormant for 2 years. I also have 2 more inactive credit cards with other companies. Presently, I don’t have any mortgage or car loans and I pay in full my credit card monthly and on time.
The questions are: Do I need to use and activate all my other credit cards to avoid it from being closed by the credit card companies and how do I improve or at least keep my current Fico score ( which I presume went down already, just checked it on free annual credit report and already showed a negative remark)? Any comment will be greatly appreciated.
Thanks,
Confused
Young Frankenstein
December 9th, 2008 at 12:31 pm
charge something and keep a small balance on each
December 10th, 2008 at 3:53 pm
No, you just have to pay your yearly fee. There is no stipulation (to my knowledge) that anyone must use a credit card. But you must pay yearly fees.
Did you contact them and request that card be reactivated? I would, and demand they correct it on your credit report.
December 12th, 2008 at 9:47 am
yes and more
December 13th, 2008 at 9:46 am
Most likely the bank closed one of your credit cards because you had three cards them. Most banks don’t want you to have more than 2 cards with them. Probably you had three because at least one of those cards was “inherited” by your current bank when your current bank either 1) merged with another bank or 2) bought out another bank, or 3) bought the credit card portfolio of another bank.
I have never had a bank close a credit card in 30 years due to inactivity. Remember if you don’t use it, it costs them nothing for you to carry it. If you do eventually use it, then they get a fee depending on the price of what you buy.
There might be something in the FICO formula whereby inactive cards carry less weight when they calculate your FICO score.
Selling your house should not reduce your credit score unless you paid off a mortgage in the process. Accounts with at least some debt being carried are scored higher by FICO than ones without debt. This is because carrying some debt and paying on time is, in their view, an indicator of someone who can manage debt, whereas someone without any debt isn’t necessarily exhibiting this trait.
Finally, if you haven’t paid late there should be no “negative remark” on your credit report. If there is, it is an error that you can have removed.
December 14th, 2008 at 9:41 am
Use your cards at least 1x every few years. That will keep it from being dormant. Cardholders can and do check credit every once in a while and if there has been a decrease, they may cancel them or raise rates. Congress is currently acting to prevent that from happening. Also, a card that is used and not listed as “inactive” will help your credit. Don’t keep a balance on it, just pay it off after you use it.
December 15th, 2008 at 8:47 am
Have you considered using one of those authorized user tradeline programs. They are very affordable and would get you well on your way to having better credit. My mom used it and not only was able to open other accounts, but her score jumped 51 points. Check out the free evaluation form at They can help.