I thought part of what goes into your AAOA is oldest OPEN accounts? When ever I close something, like pay off a loan my score goes down slightly but once the replacement is added it goes back up.
It still reports closed but it isn't open which means management of that account ceased and creditors can no longer get a full picture if it was the oldest account that was closed. My student loans are 14 years old in good standing always, once they are paid off and closed, I will need an open account back there to help my AAOA. Which is my Orchard card. Started at $300 now at $1100 CL for all eternity. I don't think I will ever close it but we'll see.
It still reports closed but it isn't open which means management of that account ceased and creditors can no longer get a full picture if it was the oldest account that was closed. My student loans are 14 years old in good standing always, once they are paid off and closed, I will need an open account back there to help my AAOA. Which is my Orchard card. Started at $300 now at $1100 CL for all eternity. I don't think I will ever close it but we'll see.
Cards: Orchard Bank ($1100) | Cap1 Cash Rewards ($2500) | Chase Freedom ($1000) | Best Buy ($2500) | Discover It ($1000) | Barclay Rewards ($2500) | Current scores: EX FAKO: 684, CK TU: 649, FICO EQ: 680, FICO TU: 698, FICO EX: 658 Happy Homeowner Since 2/6/13! 
@MovingForward_2012 wrote:
I thought part of what goes into your AAOA is oldest OPEN accounts? When ever I close something, like pay off a loan my score goes down slightly but once the replacement is added it goes back up.
It still reports closed but it isn't open which means management of that account ceased and creditors can no longer get a full picture if it was the oldest account that was closed. My student loans are 14 years old in good standing always, once they are paid off and closed, I will need an open account back there to help my AAOA. Which is my Orchard card. Started at $300 now at $1100 CL for all eternity. I don't think I will ever close it but we'll see.
No, AAoA is on all accounts in the credit report. Paying off loans might impact another part of the FICO, such as loan mix, which is why the score could go down.
As I posted in another thread, quoting a Product Manager from FICO, the 10 years for closed accounts to continue reporting is a MAXIMUM, the CRAs remove closed accounts 10 years after closure. However, the lender can purge it from their records at any times, and then it will no longer appear on the credit report
http://www.bankrate.com/finance/credit-cards/closing-credit-card-dings-credit-score-2.aspx
An account that is open with a good history can stay on forever -- it could stay on for 20 years. The bureaus will automatically remove (a closed account) in 10 years, but that could be removed sooner if that credit card issuer decides to remove it. Once it's closed and paid off, that account then becomes inactive, and it's not uncommon for the credit card issuer after a few years or even sooner to just delete that completely, just purge it from their records
@bs6054 wrote:
@MovingForward_2012 wrote:
I thought part of what goes into your AAOA is oldest OPEN accounts? When ever I close something, like pay off a loan my score goes down slightly but once the replacement is added it goes back up.
It still reports closed but it isn't open which means management of that account ceased and creditors can no longer get a full picture if it was the oldest account that was closed. My student loans are 14 years old in good standing always, once they are paid off and closed, I will need an open account back there to help my AAOA. Which is my Orchard card. Started at $300 now at $1100 CL for all eternity. I don't think I will ever close it but we'll see.No, AAoA is on all accounts in the credit report. Paying off loans might impact another part of the FICO, such as loan mix, which is why the score could go down.
As I posted in another thread, quoting a Product Manager from FICO, the 10 years for closed accounts to continue reporting is a MAXIMUM, the CRAs remove closed accounts 10 years after closure. However, the lender can purge it from their records at any times, and then it will no longer appear on the credit report
http://www.bankrate.com/finance/credit-cards/closing-credit-card-dings-credit-score-2.aspx
An account that is open with a good history can stay on forever -- it could stay on for 20 years. The bureaus will automatically remove (a closed account) in 10 years, but that could be removed sooner if that credit card issuer decides to remove it. Once it's closed and paid off, that account then becomes inactive, and it's not uncommon for the credit card issuer after a few years or even sooner to just delete that completely, just purge it from their records
It's neither a minimum or a maximum. Generally accounts will report for 10 years after closure. Just as they can fall off earlier, there are also accounts of them reporting much longer. It's just a general rule of thumb.
Starting Score: ~500 (12/01/2008)
If all of this info is correct (and no doubt it is ) then I would rather NOT have a 10 year old ACTIVE card with a $500 limit in my file surrounded by much better cards. Might make my AAoA shorter but at least it's filled with great cards with great limits. If it's ever a reason for decline I'll recon them and point it out. I seriously doubt a ten year old sub prime card reporting a zero balance will sway (whatever the flavor card of the year is) to my favor...
I dumped my low limit cards just last month, one at $500 and one at $1,200 when I got the Sapphire Preferred. They were both Chase cards as well but they served the purpose a long time ago. Even the prson that answered the recon call agreed that they were not needed anymore.
@toppers555 wrote:Me personally I look at it as cleaning house. My credit has come a long way from where it use to be , and if new credit see the low limit account still being used I don't see any sense in them wanting to offer me higher limits then whatmy current creditors extend.
Well, if you see a credit applicant with a 3-year-old 300-limit card and a one-year-old 20,000-limit card, would you really grant a limit of 300 or lower to the applicant using the above reasoning?
