How did it all get so complicated?

[Rusty Hills Farm]

As I posted before, I had a little dust-up with Home Depot over some bad roofing materials. They finally gave me credit on my account for the materials--and then lowered my credit limit to just cover what the balance of the account is after the credit. Well, in the midst of this, I got a letter from Citibank saying that since my account with them had a zero balance and I hadn't used their card in over a year, they were closing the account. That if I really did want the account, all I would have to do is reapply. I didn't give it a second thought because, as they noted, I never use the card. I just figured it was better off closed.

I didn't think about repercussions.

Next the credit reporting agencies lowered my credit score BECAUSE of that account being closed by the bank. THEN Home Depot closed their account, citing my credit report "issues". What issues? I have never made a late payment, never missed a payment, never been over my limit on any of my accounts, always pay WAY more than minimums. The only "bad" mark is the account closed because I never used it! But Home Depot is using that as an excuse, despite a lengthy discussion with them, to close my account. They said that after I resolve "my credit issues" I could reapply! Yeah, right. And I have a bridge for sale!

That makes 2 closed accounts in 2 months. Does that now mean ALL my accounts are gonna look at my credit report and decide that, despite all evidence to the contrary, I am now a bad credit risk?!?

How can this happen? I have a guaranteed income. I own a home. I PAY my bills. I am NEVER late. I am NEVER over my limit. I always pay WAY more than the minimums. In fact I have 2 other accounts with zero balances. Are they gonna get closed too?

What the heck did I do wrong?

Rusty

 

[Wifezilla]

Bureaucracy sucks!!

Actually you can sue for something called SLANDER OF CREDIT. Have a lawyer buddy draft up a letter for Citibank AND Home Depot. I doubt anything will come of it, but I know it will annoy them.

 

[SportTees]

wOW Sorry I've never heard of that. I've heard if you don't use your credit the rating goes down though ??

 

[cassie]

Sometimes all you have to do is breathe and you get in trouble.

 

[AK Michelle]

I used to be in Real Estate and helped many clients get through credit hurdles.

Bottom line, the credit companies only look at the numbers on the report.

We have had some luck with letters of explanation. I had a client write a letter about never missing a payment and always paying more than the minimum and she even got a statement from the store that closed her account showing a payment every month and noting that the payment was above the minimum due. Then she would send a copy of the statement, the letter of explanation to any of her other credit companies that questioned her credit.

As for the account closed due to inactivity. Call the credit agancies and see if they have a status for that, I think they do, which will be percieved differently than closed by the bank which usually means for lack of payment. I'm assuming you have a letter from said bank showing that it was closed for inactivity.

It is a lot of hoops but worth it in the end. It takes 7 years for that account to move off your report and will affect your score until it does.

 

[Frogdogtimestwo]

You are not alone I promise, we too have faced those issues lately because of zero balances they have either jacked the rate to over 20% or closed the accounts therefore affecting our credit score. One closed a zero balance on 8500 limit, and taking that away from your credit availability lowered our fica big time, since this whole credit crunch started our credit score has dropped more than 35 points for no reason other than they can. We have excellent credit, never late, never over etc also! We decided to throw in the towel and take the hit on our credit score and closed them ALL and will never reopen thats for sure! They are doing it as much as they can right now before the laws change the first round of changes in credit laws was in OCT and the next round of laws are supposed to go in effect in Jan I think, (they are laws to protect the consumer from EXACTLY this happening) I am sure there are others who have more expertise in explaining this but I just wanted to pipe in our situation.

 

[SarahFair]

Quote:
hahaha! I was going to say the same thing!

 

[Mattemma]

And don't forget that insurance companies look at credit reports now when you get/renew your car,home,and life insurance. It is terrible how closing accounts can mess up your credit score.Insurance companies looking at credit really annoys me. Hope things improve for you soon!!!

 

[seismic wonder2]

OK,
Here's something sneeky but may help.
On the cards with a "0" balance the you NEVER USE, send them a check for $.50.
It will go in as a +balance. They can't close an account with a positive balance and it really screws their accounting dept.
It takes about 25 to 30 bucks to process and send a statement to you for that 50 cents.

It won't help with anything except avoiding the "closed for lack of use" thing

 

[mjdtexan]

Quote:
That is sneaky.

I usually just by something minimal to keep the accounts alive. I never use the cards except that minimal thing. I do like to have them though because you just never know.

I hate to hear that the credit people are doing this to you.