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Registered: ‎05-05-2013
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Canceling Oldest Credit Card Misinformation

So I did a lot of reading about canceling credit cards because I wanted to cancel my two oldest credit cards. They we're horrible cards low limits and high interest rates. (First Premier and Capitalone) All the advice I found said the exact same thing, "Don't cancel your oldest credit cards because it will lower your average age of accounts". Tiered of carrying bad cards that I could do nothing with, I cancelled them both. I have had them for about 8 years each so I was really worried about the impact that it would have on my credit score. I was shocked to find out that my credit score actually went up 20 points! How could this possible happen. Well I realized that the average age of account is not calculated based on your oldest credit card, it based on your oldest account period. It doesn't differentiate between revolving, installment, mortgage or even closed account. Because of this my oldest account was actually a student loan that was taken our my freshman year in college. It is still listed as my oldest account and thus my Aaoa wasn't drastically effected. So if you have student loans or any other account, their age actually helps your Aaoa. If you want to cancel your oldest credit card and you have older student loan or any other type of account do it. No use being stuck with a bad card if you don't have to be. 

 

 

If you were wondering my credit score are 

767 EX FICO (Pulled last week by AMEX)

785 EQ FICO 

770 TU FICO

 

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Registered: ‎02-07-2013
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Re: Canceling Oldest Credit Card Misinformation

Welcome to the forum

 

Open or closed accounts doesn't matter both still count for a 10 year period

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Re: Canceling Oldest Credit Card Misinformation

Yeah I know they do. That's basically what I was trying to say when I referenced closed accounts. Thanks for the welcome. 

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Re: Canceling Oldest Credit Card Misinformation

+1

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Re: Canceling Oldest Credit Card Misinformation


myjourney wrote:

Welcome to the forum

 

Open or closed accounts doesn't matter both still count for a 10 year period


...and sometimes longer.  I have one closed account still reporting that is well beyond a decade old.  I'm not complaining!

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Re: Canceling Oldest Credit Card Misinformation

I have a car loan that was paid off in 1995 that is still reporting on mine.


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Re: Canceling Oldest Credit Card Misinformation


Shogun wrote:

I have a car loan that was paid off in 1995 that is still reporting on mine.


So a question I hadn't really thought about before.   I was looking in more detail at my three CRB report.    There is one old mortgage that is correctly marked as closed by 2 bureaus, but as open (with $0 balance) by the third.  All note it was sold or transferred, including the one marking it open.  And it does appear in the "current" area of the report rather than "current closed".   And all payment history ceases in 2008.

 

So I assume that the mortgage company isn't still reporting this as open to just one of the bureaus, but I am not sure how this is happening!  Did the bureau miss an "account closed' notification?

 

Established Contributor
Posts: 747
Registered: ‎10-15-2012
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Re: Canceling Oldest Credit Card Misinformation

Yes OP, but I think you may still be confused about how AAoA works. True it does count all types of accounts, but open and closed accounts are counted as well. Closing a card doesn't affect your AAoA, whether you have an older account or not.


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Re: Canceling Oldest Credit Card Misinformation


tomcatant1 wrote:

So I did a lot of reading about canceling credit cards because I wanted to cancel my two oldest credit cards. They we're horrible cards low limits and high interest rates. (First Premier and Capitalone) All the advice I found said the exact same thing, "Don't cancel your oldest credit cards because it will lower your average age of accounts". Tiered of carrying bad cards that I could do nothing with, I cancelled them both. I have had them for about 8 years each so I was really worried about the impact that it would have on my credit score. I was shocked to find out that my credit score actually went up 20 points! How could this possible happen. Well I realized that the average age of account is not calculated based on your oldest credit card, it based on your oldest account period. It doesn't differentiate between revolving, installment, mortgage or even closed account. Because of this my oldest account was actually a student loan that was taken our my freshman year in college. It is still listed as my oldest account and thus my Aaoa wasn't drastically effected. So if you have student loans or any other account, their age actually helps your Aaoa. If you want to cancel your oldest credit card and you have older student loan or any other type of account do it. No use being stuck with a bad card if you don't have to be. 

 

 

If you were wondering my credit score are 

767 EX FICO (Pulled last week by AMEX)

785 EQ FICO 

770 TU FICO

 


Welcome to myFICO. 

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Valued Contributor
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Registered: ‎07-12-2011
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Re: Canceling Oldest Credit Card Misinformation

[ Edited ]
+1 @Simply827
Welcome to the Forums!!! @tomcatant1!
Here is a good link about how closed accounts affect FICO. Closing an account in itself does not affect your AAoAs. The account still reports for 10 years. ( most of the time). AAoA factors in ALL accounts- closed or open still reporting. Because not all of the same accounts report on all CRAs, your AAoA can be different on all 3.
Hope this helps.

http://ficoforums.myfico.com/t5/Credit-Cards/Closing-Credit-Cards/td-p/347190

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