07-18-2007 05:15 PM
07-18-2007 05:29 PM
“Closing credit card accounts can hurt your score unless the accounts were opened less than two years ago, and you have over six credit cards,” states Jamison, adding that consumers should make sure to keep their old credit cards open as well. “Fair Isaac’s credit scoring software assumes that people who have had credit for a longer time are at less risk of defaulting on payments.”
The reality is opened and closed CC TLs are weighted equally by FI scoring. As long as the said closed CC reports positive and has a $0 balance and there is no change in util%, scores should not decrease. Moreover, closed CC TLs are included in credit history length as well as average account age. So I really question Jamison's notion on closing CCs that have a history of less than 2 years. In the long term though, a closed TL falls off your CRs after 10 years and this can lower scores. But again that is long term. Jamison is suggesting closed TLs do not count for much, not true at all.