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Canceling Oldest Credit Card Misinformation

New Member

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

 

Message 1 of 15
14 REPLIES
Super Contributor

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

Before you app think...
Have you done your research of the CC?
Does it fit your spending?
Do you have a plan for the bonus w/o going into debt?
Can you afford the AF?
Do you know the cards benefits? Is it worth the HP?
Message 2 of 15
New Member

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. 

Message 3 of 15
Established Contributor

Re: Canceling Oldest Credit Card Misinformation

+1

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Message 4 of 15
Senior Contributor

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!

Message 5 of 15
Moderator Emeritus

Re: Canceling Oldest Credit Card Misinformation

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

Starting Score: 504
July 2013 score:
EQ FICO 819, TU08 778, EX "806 lender pull 07/26/2013
Goal Score: All Scores 760+, Newest goal 800+
Take the myFICO Fitness Challenge

Current scores after adding $81K in CLs and 2 new cars since July 2013
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Message 6 of 15
Valued Contributor

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?

 

Message 7 of 15
Established Contributor

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.


Starting Score: 515
Current Score: EQ08 711 EX08 731 TU08 735
Goal Score: 740+

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Message 8 of 15
Valued Contributor

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. 

 photo Logo - Credit Card Collection - Data Inclusive_zpskiw5xfjj.jpg photo emerald_zpsfitcxbh5.jpg
Message 9 of 15
Community Leader
Valued Contributor

Re: Canceling Oldest Credit Card Misinformation

+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

Starting Score: 642
Current Score: EQ 773, EX 780, TU 777 (All FICO)
Goal Score: 800+

Cards: NFCU Flagship 50K, DC 30K, BCP 28.6K, Arrival+ 25K, Citi DP 22.8K, CSR 20.5K, TotalRewards 25K, QuickSilver 20K

Message 10 of 15