quick question regarding closing my card

[Anonymous]

So for anyone whose seen my previous post, I have been working on rebuilding my credit for the last roughly eighteen months and am working hard to try and purchase my parents home from them w my VA home loan. I have a  couple of outstanding collections items I am working on but compared to where i was a year ago, its night and day. 

Recently opened a checking acct, unsecured cash rewards Visa, CLOC, and refinanced my car loan, through Navy Fed. Prior to that, the only credit card I carried was a secured card with an 800 dollar limit (of my own money obviously) through USAA for the past year and change. 

I am trying quite hard to get my score up just a bit more so that I'm able to purchase my parents home in the next couple of months. I make decent money and have minimal bills(other than the obvious- my car loan, cell phone, etc, and now, my one unsecured card I carry - I also have the CLOC but its only for emergencies and its only for a grand). 

So my question is, I have had some fairly bad experiences of late with USAA. I know YMMV, but to me, they are far different than they were even five years ago. What I'd LIKE to do, since it's my own money, is close out that secured Visa and be done w them, just get my money, and be on my way. That is my preference. 

My question is since I've read that your closed card will stay on your report for years even after its closed, will this in any way hurt me? Could it hurt me because between my CLOC and VISA my limit is only about 3k? (just wondering about the available credit aspect since I know it's looked at) Or would I be just fine closing it out since I have the other card(which is unsecured) and the CLOC? 

If I am better off keeping it, that's fine, I will do so. I just hate having my money tied up somewhere I really despise having to reach out to about ANYTHING anymore. So my preference is to close it out, but I dont want my score dropping because of it be it 2 points or 10. 

Thanks! 

[enjoimorenow]

Well, closing the card is going to lower your total available credit, so depending on your utilization it could drop your scores slightly.

The card will continue to report for 10 years, so it will not hurt your AAoA until it drops off.  As long as you have added other cards within a short period of time after opening the USAA secured, then it won't have much impact on your score.

I would personally leave the card open and just not use it until you get either another card to replace it, or increase your CL on your NFCU card and CLOC.  Unless you need the $800 now, but if you can wait a couple months to get CLIs on your NFCU stuff then I'd just do that.

[Anonymous]

I believe the CLOC is a revolving account so currently you have the 3 revolving accounts (2 unsecured, 1 secured). Utilization would come into play as well as AAoA I believe. If you plan to close the secured card and open up a new account or two, it could potentially bring down your AAoA which might result in a slight point decrease. As for utilization, depending on your current usage of your accounts, it will drop your overall total credit available which would increase your overall utilization should you have one of your other lines of credit utilized. I know there are percentage pools when it comes to utilization so if you can stay within whatever % pool you're currently in, I can't imagine it would do too much to your scores. It's hard to predict what FICO scores will do. 

I am sure others will be able to give you more useful advice, but I was just chiming in with what I've read.

[K-in-Boston]

I would also advise leaving it open, at least until the mortgage is secured.  You didn't list your scores, but most lenders' underwriting for VA loans only require a 620 and unlike a conventional loan you're not going to pay more if you're closer to that and you're not going to pay less if you have 850s.  Obviously with really high scores, you may be able to actually get a lower rate through a conventional loan but you would also likely need to come up with a substantial down payment and possibly have to pay for PMI depending on the loan to value ratio.  If you can get into a VA loan now, I would strongly advise you to do so.  I bought my house just over 6 years ago, and my lender has talked me into doing an in-place VA refinance loan twice.  I refinanced in June at 3.5% fixed for 30 years and I see that rates are already around 4.5% today with several other 0.25% increases coming from the Fed soon.

Also, depending on your credit profile, it may be worth it after you close on the loan to close that secured card and use the $800 to get both a Bank of America and Discover secured card.  Those will unsecure and grow very nicely as your credit improves.