- Green Member
- Posts: 5
- Joined: Mon Dec 09, 2013 11:37 am
- Location: TX
CK also seems to report utilization improperly if you have the misfortune of having accounts closed (by the grantor) which still have balances on them. If the account is closed, it obviously doesn't count towards your total credit limit, but it also stops counting the balance as part of your utilization. That can make your utilization (and CK score) look much better than it actually is.
For instance, say you had two cards, each with $500 credit limits, with one maxed out and no balance on the other. If the grantor closes the maxed out account (which can happen due to a general history of delinquency, even if you're current for quite some time afterward), your real total credit limit would then be $500 and your utilization would be 100% because the balance is still counting, even though the card is closed. CK's system would claim your utilization is 0% because it only counts the card that's still open. It's like the other balance doesn't exist at all to them if the card is closed. And there's a drastic difference in score between 0% and 100% utilization, of course.
Obviously, that's a bad situation to be in, anyway. But if you relied completely on what CK says, you'd mistakenly think your score was much better than it really was (even if it ain't so hot in general).