Sorry in advance, I know I will probably tell everything and confuse some, like myself. 🙂 I was wondering if anyone knows how your credit score is affected when your credit card company goes under. I have bad credit, sub prime mortgage, my own stupidity with credit in the past and on and on, but I am working on cleaning it up. I only had one active card because I didn’t want to repeat past mistakes. I received a letter telling me that my card was terminated effective immediately due to no problems of my own.
When I called the rep for the company told me that the company had folded and wasn’t bought out or declared bankrupt just closed their doors. I am working so hard to clear past debt as well as make some kind of leeway on my mortgage situation because right now I am basically paying rent to stay there, it is interest only. I want to refi but don’t know what this closure of my only active card will do to my credit score. Anyone know anything about it? Thanks in advance.
I don’t think it would negatively affect your credit score, but what you need to know is that someone could still buy the debt. It’s very unusual they’d just close their doors one day and not be required to sell parts of the business to pay THEIR debts. I worked in the mortgage industry (eek) for years, and even when companies just folded, there was still a process to sell their assets (usually meaning customer data) afterwards so their debtors wouldn’t come away empty handed.
It might not happen for months or even up to a year, but I wouldn’t count on this debt being erased.