Re: How do I close CBUSA accounts

Posted by Brent (66.67.251.160) on October 01, 2003 at 18:55:02:

In Reply to: Re: How do I close CBUSA accounts posted by LadynRed on August 29, 2003 at 09:35:12:

I'm researching the same topic as Nick. And I think the notion that you'd be lowering your credit rating by closing these accounts may be oversimplifeid. The "credit score" is usually referring to a FICO Score, developed by Fair Isaac Co.

You can go to http://www.fairisaac.com and download a copy of their brochure "Understanding Your Credit Score"

A quick summary:
35% of your score is based on payment history
30% is based on amounts owed
15% is based on length of credit history
10% is based on your rate of accepting new credit
10% is based on your mix of account types

The item in question is the 15% they attribute to the length of credit history. The brochure explains that they use two keys: The age of the oldest account and the average age of all accounts.

So closing an unused account may have a slightly negative effect on your score, no effect, or even a slightly positive effect (especially if this account is newer than all of the ones you intend to keep)

I will note that it states in the calculation of the 30% factor based on how much you owe, that closing accounts with zero balance will NOT impact that portion of your score.

They also note in a blurb on the topic of closing accounts to try to lower your score, that bad payment history will stay on your credit record regardless of whether the account is open or closed.

In my personal case, the accounts in question are not helping or hurting my credit score, so they only pose a potential for future headaches. A closed account can never cause a problem. Nobody can ever steal the card number and run up a balance.

I successfully closed another account, not from CBUSA. I did so only by having a current account with them, with numbers they COULD find, and after that I got immediate help cleaning up my report.

I'm hoping it doesn't require this for myself or for any of you when dealing with CBUSA

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