WILL MY FICO SCORE TAKE A HIT IF A CREDITOR DECIDES TO NO LONGER MAINTAIN A BRANDED CREDIT CARD?
If an oil company (e.g., Shell, Chevron, etc.) or other store card discontinues its credit card program and closes all accounts—even involuntarily—it can negatively impact your FICO score in a few ways:
1. Credit Utilization Ratio Increases. When the card is closed, your available credit drops, which can increase your overall credit utilization (the percentage of total available credit you’re using). FICO scores heavily weigh this ratio. Lower available credit leads to a potentially worse score.
2. Average Age of Credit Drops. If the card was one of your oldest accounts, its closure may reduce your average credit history length, another important factor in your FICO score.
3. Fewer Accounts in Good Standing. Fewer open accounts can reduce your “credit mix” and overall active positive history, especially if it was your only gas/store card.
Why This Seems Unfair:
You didn’t choose to close the account. The creditor did. Yet the FICO scoring model doesn’t differentiate between voluntary and involuntary account closures in its treatment of:
• Credit utilization
• Account age
• Active account diversity
Avenues of Recourse:
1. Check Your Credit Reports. Go to AnnualCreditReport.com and download your reports from Experian, Equifax, and TransUnion. Confirm that the account is reported as “closed by creditor” and not “closed by consumer”—this helps clarify it wasn’t your choice.
2. Dispute Errors. If the card is mistakenly marked “closed by consumer” or reports inaccurate information:
• File disputes online with each credit bureau.
• Provide documentation (e.g., a letter or screenshot from the oil company).
3. Add a Consumer Statement. You can add a brief note to your credit report indicating the company sponsoring the card decided to no longer maintain it. This won’t affect your score, but may help future creditors who are reviewing your file.
4. Call the Card Issuer. Ask if they’re transferring the portfolio to another bank (e.g., from Shell Bank to Citi or Synchrony?). If so, you may be able to keep the account and credit history via a product change or portfolio transfer.
5. Mitigate Score Impact Proactively:
To balance your score:
• Pay down balances on other cards to keep your utilization low.
• Ask for a credit line increase on another account.
• Open a new card only if needed—this could restore your lost available credit.
Final Thoughts:
It’s frustrating that a creditor’s business decision can impact your credit standing, but understanding how the FICO formula works lets you take steps to minimize damage and stay in control of your financial health.
