Can you 'splain this to me?

Ok Lucy lemme splain. If you simply don't use it your score won't be affected so just don't use it. I think the reason is that it lowers your available credit when you close an account and any balances you have left on any other cards will look like there is a higher usage due to less available money.

It feels like a thinly vailed threat. I don't think they'll really ruin your credit score over closure of an account. It's like a last-ditch effort to get money out of you.

They're not very good at explaining the truth are they!

The reasoning is that you won't have access to more funds and no payments will be recorded. Two key factors in reporting credit. Since the loan has been repaid and you have no intention to apply for more credit, YOU initiate contact with the CU. Request the closure. From what I've read, it COULD affect a credit score but in your case, only minimally and for only a short time. It was mentioned that the most important factor in a closed account is which party initiated the closure. I would write a letter to your Credit Union requesting the old loan account be closed. If the CU closes it, it could be viewed as abandoned. I wouldn't worry too much. I think this may have been a prompt from the CU to entice you into using the account. They are seeking revenue Close the account. Make it your choice.

Was it an actual loan you took out?

This has always been something I have felt needs to be changed in credit reporting. The same thing happens if you close credit cards. It adversely affects your credit report. Part of this is because the reason for the closing is not stated on the report. Even if you choose to close it, and not the bank or credit card issuer, it is assumed the credit was "revoked" for a reason other than "it was the right choice to make." Either way, it does not prevent me from doing what I feel is necessary despite its effect on my credit score, which frankly I don't care about anyway.

That is ridiculous! I don’t like all the things people have to do to get good credit. It can be such a hassle.

It looks like you got your answer!

It does not make sense. I don't know how it can affect your credit score for the worst.

I would believe that if the account is open and not being used that should not affect your credit score as there technically should not be any inquiries on your credit, unless they consider an open account, regardless of the balance to be a liability. Our banking differs greatly between our countries, so I am not totally sure about this, sorry.

There are some things in this world that make no sense whatsoever. This would seem to be one of them.

Finance is always a bit of a mystery, but this sounds like an attempt to get you spending

It doesn’t make any sense but I was told the same when I closed out two credit cards that I never use.

I don't know how banks in your country operate especially where loan is concerned. Here we don't have to pay something to get a loan.

No, it does not make sense. I am so glad we do not have that credit score system here.

It doesn't make any sense; but that's the way it is. You are wise to make a charge and then pay for it.

I always thought the less credit resources you have on hand the worst you credit score, like someone who has 50 credit cards, but I don't know for sure.