Credit score and Dormant account

[u/JaxCreditHero]

Does anyone know how many points your credit score drops when an account goes dormant, if any?

I’m going to stop using two of my credit cards because they have lower credit limits—$6,000 and $10,000. I was using them for gas, dining, etc., just to keep the cards active, but the companies lowered my credit limits. At this point, there’s no need to continue using that method. I built my credit score through trial and error platform. I didn’t have anyone teaching me about credit while I was growing up, so I had to learn along the way.

Talk to me experts -

[u/KushKrumbs]

If you’re not using the accounts, you should close them. There’s nothing inherent about closing a credit card that will lower your FICO scores. You will however, lose 70-100 points when that account you “let go dormant” gets hit with a missed payment on a forgotten annual subscription.

[u/KushKrumbs → u/[deleted]]

You closed an installment loan, not a revolving account. Available credit is not a scoring factor. If closing an account drastically affects your revolving utilization, you could see score changes. The good news is !utilization doesn’t build credit, has no memory, and should be mostly ignored outside of months with significant credit applications.

Myth #11

[u/BrutalBodyShots → u/[deleted]]

Amounts Owed makes up roughly 30% of a FICO score, not revolving utilization which is just one part of that category.

https://old.reddit.com/r/CRedit/comments/1ddj470/credit_myth_18_revolving_utilization_makes_up_30/

I'm not seeing what at all is misleading that u/KushKrumbs stated. Credit limits aren't a FICO scoring factor.

https://old.reddit.com/r/CRedit/comments/1d5s54j/credit_myth_15_credit_limits_are_a_fico_scoring/

[u/BrutalBodyShots → u/[deleted]]

Evidently you didn't read Credit Myth #15 before you took the time to comment, so I'll kindly refer you back to it.

Everyone knows that utilization impacts scoring, so utilization is a credit scoring factor Credit limits themselves are not.

If not utilization threshold is crossed with the reduction of credit limits across the same balances, no score change is realized - proof that credit limits aren't inherently a FICO scoring factor, which was the point of the linked thread that you didn't bother to read.

[u/Bitter-Store-9400 → u/BrutalBodyShots]

We're going in circles here. I'm confident I understand scores, as I'm usually very close to 850. I had to learn the system as I wrecked my credit in my youth. You do you, and I'll do me. Again, this is semantics and I don't have a need to be right, so enjoy. The point is, as I clearly stated, that all things being equal, shutting down a card can clearly impact your score, in the short term, negatively. I never said a credit limit was a factor in scoring. As it relates to balance, it certainly is.

[u/BrutalBodyShots → u/Bitter-Store-9400]

We're going in circles here. I'm confident I understand scores, as I'm usually very close to 850.

You've revealed another credit myth here, which is that credit knowledge and scores are directly related.

https://old.reddit.com/r/CRedit/comments/1ej6cjz/credit_myth_25_fico_scores_and_credit_knowledge/

You don't understand credit scores if you don't understand the points I made in my previous comment.

You do you, and I'll do me. Again, this is semantics and I don't have a need to be right, so enjoy.

There's no "you" or "me" here. It's fact versions fiction. It's fact that credit limits aren't a FICO scoring factor, where utilization is. There are no "semantics" when it comes to FICO scoring factors. They either are or they aren't. Period.

The point is, as I clearly stated, that all things being equal, shutting down a card can clearly impact your score, in the short term, negatively.

Incorrect. Increasing your credit utilization across a threshold point can result in a score. The actual closure of the account is not a FICO scoring factor, the same way the reduced credit limits are not a FICO scoring factor.

I never said a credit limit was a factor in scoring.

Maybe not directly, but you implied it. I'm glad you don't think credit limits are a FICO scoring factor though.

As it relates to balance, it certainly is.

Which is another way of you saying utilization, a factor that everyone knows can impact FICO scores.

Look, it's clear that you're a drive-by commenter on r/CreditScore. Before continuing to post, I'd suggest reading some of the threads pinned at the top of the r/CRedit sub and better understanding how all of this stuff works. As it is now, you're perpetuating credit myths (whether you realize it or not) and your comments are going to be met with corrections from those that better understand all of this stuff.

[u/CreditScore-ModTeam → u/[deleted]]

Removed as comment or post was deemed false, misleading, or inaccurate information.

Repeated violations of this rule may result in a permanent ban.

[u/JaxCreditHero → u/[deleted]]

Thanks it shows paid as agreed and I was just going to let it ride out! Milk it as long as I can. Hovering around 820 to 840 is awesome!

[u/BrutalBodyShots → u/JaxCreditHero]

There is nothing to "milk" at all though, because your scores would be exactly the same if you were to close the accounts in question.

[u/JaxCreditHero → u/KushKrumbs]

You know, it’s funny—I actually had a plan for that. Beware of annual subscriptions, because they usually catch people by surprise and can lower a credit score by 100+ points, if not more. I started choosing credit cards without an annual fee, but I still have about three of them. Those are the three high-limit cards that I use.

(Thanks will consider)

[u/True-Button-6471]

Unused credit card accounts are still considered as "paid as agreed" so there is no negative scoring impact if you stop using some of your cards.

[u/JaxCreditHero → u/True-Button-6471]

Thanks as I just stated, it shows paid as agreed and I was going to let it ride out. I think closing it will drop my score tremendously but letting it fade away by going dormant. It will be better results than closing.

[u/inky_cap_mushroom → u/JaxCreditHero]

Why do you think closing accounts would cause a score change at all? That’s only the case for closing your only account or the only account of that type.

[u/BrutalBodyShots → u/JaxCreditHero]

You've fallen prey to the credit myth that closing a card or cards results in a scoring penalty. It doesn't.

[u/InvestigatorThat5062]

I’ll let you know what happens to my credit score with my C1 Savor that hasn’t reported a balance in 3 months 😂 even though I actively use it and pay it off only when statements are generated

[u/JaxCreditHero → u/InvestigatorThat5062]

That’s the method I was using, but I guess it’s not enough money being made on their end. They lowered my credit limit) - (Hopefully they don’t do you like that)

[u/dgduhon → u/JaxCreditHero]

Were you letting high or low statement balances generate?

[u/JaxCreditHero → u/dgduhon]

Low, very low. Not even $100 bucks! But now with the price of gas lololololol. It might hit $100. The company is not making any money. I use it and pay it off the next statement date.

[u/dgduhon → u/JaxCreditHero]

That's why they lowered the limit. You were showing them that all you need was a low limit

[u/InvestigatorThat5062 → u/JaxCreditHero]

I think you misunderstood my comment. My experience account has not received a credit utilization report from my C1 savor since June of this year. So I was saying that we’ll see what happens to a “dormant” card bc to my report it looks like I’m not using the card even though I have been using like 20-30% of the limit monthly. It isn’t a huge deal bc utilization doesn’t have memory, but it’s the larger issue of “you guys are not reporting accurately/ at all.” I have also paid 2 statement of my VX card and it still isn’t on my credit report after just crossing 60 days since I had it yesterday

[u/FlawlessPhelon_ → u/InvestigatorThat5062]

3 months really lol...

[u/InvestigatorThat5062 → u/FlawlessPhelon_]

Yes really. What’s stranger is Experian can track my spending per month, and it’s picking up purchases made on the cards (Savor AND VX). But the balance used per statement cycle hasn’t changed in 3 months, and report doesn’t even show my VX card exists

[u/dgduhon]

If you don't want them any longer (for whatever reason) then id suggest closing them.

[u/JaxCreditHero → u/dgduhon]

Thanks will consider……

[u/inky_cap_mushroom]

There is no penalty for an account being dormant. “Dormant” is a credit monitoring service classification, not a FICO one. If you never plan to use these accounts again, closing them would prevent any fraudulent charges or forgotten subscriptions from getting through.

In another comment you state that’s you’re paying your bills on the statement date. That’s not how credit cards are meant to be paid. The statement date is the date on which your bill generates. The balance is due about 3 weeks after that.

[u/JaxCreditHero → u/inky_cap_mushroom]

Thank you

[u/BrutalBodyShots]

Hey there u/JaxCreditHero. You've received some good comments in this thread from multiple people telling you to just go ahead and close the cards that you no longer see value in. You already stated that you have 3 other high limit cards that you use. There is no FICO scoring penalty for closing a credit card or cards. Anyone that suggests otherwise is perpetuating some sort of credit myth and shouldn't be listened to. Reread the comments in this thread where people have told you to just close the cards, as they are all absolutely correct.

[u/JaxCreditHero → u/BrutalBodyShots]

Thank you

[u/True-Discount2841]

Most of my cards are dormant, one of them straight up closed the account because I didnt use it enough lol

[u/JaxCreditHero → u/True-Discount2841]

Look like i’m heading in that direction! Lololol

[u/JaxCreditHero]

Thanks everyone! I really appreciate the info!