@Anonymous wrote:
I currently have 30 active credit accounts. I've used every single one of them and only 5 of them have a balance, soon to be 4.
I've taken on this credit repairing journey and have had it fluctuate so much that I'm looking to take on a new angle. I've managed to get my utilization from a 58% down to 30% in a matter of 2 months. The only thing that seems to be really negatively impacting my credit scores right now is my AAoA and inquiries, although I know inquiries have little effect after so long.
My AAoA has been so low for so long that I'm finally considering closing a lot of these cards that I've managed to acquire to raise my total limits which in turn helped me to lower my utilization. I feel that the AAoA would have a much more positive effect in the long run, considering that I could always try to get CLIs and just make above minimum payments.
If I close these cards my fear is that my utilization will go back up, but I want to build up my history (age) of my credit report. Is it worth it to take this route? Any advice?
Thanks.
You're operating under a misconception. Closing accounts doesn't affect your average age of accounts. The accounts stay on your report for a long time, usually around 10 years.
Closing accounts will not help your score in any way.
@Anonymous wrote:
So basically the only way to grow it is to not apply for anything.
Exactly
Also, 30 accounts is a lot, yes, but when I only carry a balance on 5 of them it's much easier to manage. I keep a secured list of all of my account logins just in case I happen to use one and need to make a payment. I also have text alerts set up should anyone happen to steal my card(s) info somehow.
If you like having the accounts, no reason in the world to close any of them
@wasCB14 wrote:
@kdm31091 wrote:
@wasCB14 wrote:There's no actual penalty for closing accounts, but I wouldn't want to be in the position of having 30 cards, closing 25, and only keeping 5 open. Over the course of an entire year, AAoA would only rise by two months.
But that's not true, from my understanding. The closed accounts will continue to age and be calculated into AAOA for 10 years. So over the course of the year your AAOA is going to rise the same as it would with the accounts being open.
10 years from now, yes, it will make a bigger difference but again, AAOA isn't that big of a deal. Assuming everything else is in shape, you aren't likely going to be denied a card if your AAOA is 2 years 6 months vs 3 years, or something like that.
Hmm...if that's true, I don't see the rationale. How would a person be getting any new history or experience with an account once it's closed?
Payment history is seperate from AAOA and age of oldest account; the latter two are based on open date and that's it.
Since AAOA is only calculated on open date and not any of the payment history in there, whether an account is opened or closed on the report is irrelevant: if it's on it counts (for OC tradelines) and if it's not, it doesn't. Assuming you have any tradelines at all, if you go a full year without opening anything new, you gain 12 months AAOA. Effectively if you don't open anything new, it increases linearly proportional to time, it's only when we open new things that that gets beaten down... i.e. I've been doing this for a little over 5 years but I only have 3 and small change years AAOA (and only seemed like I got points for going across the 2 year mark) but I've been more aggressive in opening accounts than the average consumer and if I had to do it over again I might have done things a bit differently.
Payment history for whatever it's worth, appears mostly to be calculated on just not having a deliquency or derogatory. If you're clean you basically win that part of the scorecard, if you are dirty, you lose. The algorithms appear to be astonishly simplistic on this one at least in broad strokes though FICO 8 marketing literature states patterns of deliquencies are analyzed, and there are some strange things on thin files that we've seen, so maybe positive payment history is a thing even if we've never seen evidence of tradeline seasoning outside of the new accounts penalty some clean files have reported... no such thing exists for my dirty bucket apparently.
A lot of wrong info on here.
1. After closing accounts, it stays on your account for about 10 years, so by you closing the accounts neither helps nor damages your short term growth, but will hurt your long term goal.. (Although by a small percentage, as another posted pointed out).
2. Your issue now, is time. Find a new hobby, let your cards age, and with that focus on your baddies being dropped out.
3. If keeping track of your cards is an issue, try transferring balances among same issuers before you close so your utilization doesnt negatively affect your score.
1. After closing accounts, it stays on your account for about 10 years, so by you closing the accounts neither helps nor damages your short term growth, but will hurt your long term goal.. (Although by a small percentage, as another posted pointed out).
2. Your issue now, is time. Find a new hobby, let your cards age, and with that focus on your baddies being dropped out.
3. If keeping track of your cards is an issue, try transferring balances among same issuers before you close so your utilization doesnt negatively affect your score.
