jason752•4d agoMost Upvoted

Found out paying off a closed account actually dropped my score 22 points

I had this old credit card from 2018 that I stopped using when they closed it for inactivity. It was showing up on my reports with a $0 balance but still as a closed account. Thought it would help to finally pay off the tiny $47 annual fee they said I still owed. Big mistake. I checked Credit Karma after it posted and my score dropped from 712 to 690. Turns out that made it look like a recent late payment or something because the account reactivated in a weird way. Wish I had just left it alone. Anyone else get burned by trying to clean up old accounts like this?

2 comments

2 Comments

fionaw544d agoMost Upvoted

@kelly.keith your friend is lucky it only took 3 months. It's absolutely maddening how the scoring models punish people for trying to do the right thing. Paying off a debt should never hurt you, but the system is so finicky that it treats any account activity as a red flag. My sister had a similar issue with a library fine that went to collections - she paid it and her score dropped 18 points because it updated as a recent collection. The whole thing makes you wonder if it's better to just let old accounts sit there and gather dust. You'd think paying what you owe would be rewarded, but nope.

kelly.keith4d ago

My buddy did the same thing with a $35 gym membership fee from 2019. His score tanked 15 points and it took him 3 months to get it back.