Closing open accounts?

Anonymous · ‎08-11-2007

Hello. Got some questions. I have it appears many open accounts. 33 to be exact. Only 7 have a balance of any type. (Auto, Credit card, Student Loans, etc) The other open accounts all show a 0 balance. For instance one is an auto loan through GMAC. I had the car for about a year and then traded it in for a Toyota. So now Toyota Financial is on there as an open account (with a balance) and so isn't GMAC (zero balance) Should I contact GMAC and have them close the account? Is that possible. I also transferred some student loans from Sallie Mae over to the US Governments Direct Loan Servicing plan to consolidate and lock in the low interest rates. The four Sallie Mae student loans I consolidated are on there as open also. Do I contact Sallie Mae to have them closed. I know they can't be removed, but they show as open and MYFICO is saying that is the one thing hurting my score. My score is good, but I want to know if cleaning up and closing some open accounts (that I will never use again) is good. Thank you. Corey.

Anonymous · ‎08-11-2007

The accounts are showing as a positive factor and help you have aged

accounts leave them alone, the only things you would want off is negatives.

fused · ‎08-11-2007

coreyndsm wrote:
Hello. Got some questions. I have it appears many open accounts. 33 to be exact. Only 7 have a balance of any type. (Auto, Credit card, Student Loans, etc) The other open accounts all show a 0 balance. For instance one is an auto loan through GMAC. I had the car for about a year and then traded it in for a Toyota. So now Toyota Financial is on there as an open account (with a balance) and so isn't GMAC (zero balance) Should I contact GMAC and have them close the account? Is that possible. I also transferred some student loans from Sallie Mae over to the US Governments Direct Loan Servicing plan to consolidate and lock in the low interest rates. The four Sallie Mae student loans I consolidated are on there as open also. Do I contact Sallie Mae to have them closed. I know they can't be removed, but they show as open and MYFICO is saying that is the one thing hurting my score. My score is good, but I want to know if cleaning up and closing some open accounts (that I will never use again) is good. Thank you. Corey.

This message you are getting about too many accounts has been discussed at this forum a lot and there is no real consensus. I am one who thinks it's a bunch of nonsense. There are contributors at this forum with 50+ accounts and scores in the high 700's. Others disagree. In my opinion, there is no reason to close these accounts. As long as these installment loans have no derogatory items, open is better for the long-term. Once an account is closed it will fall off your credit reports in ten years. Also keep in mind, open and closed accounts are weighed and scored equally. I assume these accounts your thinking about closing all have $0 balances and no derogatory items? Make sure that whatever you decide, NEVER, EVER close any account with a balance. This could really tank your scores.

Message Edited by fused111 on 08-11-2007 03:00 PM

Anonymous · ‎08-11-2007

@fused111 wrote:

@Anonymous wrote:
Hello. Got some questions. I have it appears many open accounts. 33 to be exact. Only 7 have a balance of any type. (Auto, Credit card, Student Loans, etc) The other open accounts all show a 0 balance. For instance one is an auto loan through GMAC. I had the car for about a year and then traded it in for a Toyota. So now Toyota Financial is on there as an open account (with a balance) and so isn't GMAC (zero balance) Should I contact GMAC and have them close the account? Is that possible. I also transferred some student loans from Sallie Mae over to the US Governments Direct Loan Servicing plan to consolidate and lock in the low interest rates. The four Sallie Mae student loans I consolidated are on there as open also. Do I contact Sallie Mae to have them closed. I know they can't be removed, but they show as open and MYFICO is saying that is the one thing hurting my score. My score is good, but I want to know if cleaning up and closing some open accounts (that I will never use again) is good. Thank you. Corey.
This message you are getting about too many accounts has been discussed at this forum a lot and there is no real consensus. I am one who thinks it's a bunch of nonsense. There are contributors at this forum with 50+ accounts and scores in the high 700's. Others disagree. In my opinion, there is no reason to close these accounts. As long as these installment loans have no derogatory items, open is better for the long-term. Once an account is closed it will fall off your credit reports in ten years. Also keep in mind, open and closed accounts are weighed and scored equally. I assume these accounts your thinking about closing all have $0 balances and no derogatory items? Make sure that whatever you decide, NEVER, EVER close any account with a balance. This could really tank your scores.

Message Edited by fused111 on 08-11-2007 03:00 PM

Your assumption is correct. All the accounts I mention have zero balances and no derogatory items. I did once close an acount with a balance. Which leads me to another question I have. I have two open credit card accounts with a total balance of around 11,000 ($8,000 and $3,000) and one closed account ($3,000 - all payments have been made on time, no derogatory info, they just pissed me off once and I closed the account on them) I now have enough savings to pay off the big $8,000 CC and one of the $3,000 ones. Which of the two smaller ones should I pay off? The open one or closed one? The open one has a limit of $4,700 so paying it off would help my utilization for that card. The open one has a interest rate of %14.24 and the closed on has a rate of %8.25. My inclination is to pay the open one off but my gut says the balance on the closed account is a killer. Again, thanks for the help.

fused · ‎08-11-2007

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coreyndsm wrote:

Your assumption is correct. All the accounts I mention have zero balances and no derogatory items. I did once close an acount with a balance. Which leads me to another question I have. I have two open credit card accounts with a total balance of around 11,000 ($8,000 and $3,000) and one closed account ($3,000 - all payments have been made on time, no derogatory info, they just pissed me off once and I closed the account on them) I now have enough savings to pay off the big $8,000 CC and one of the $3,000 ones. Which of the two smaller ones should I pay off? The open one or closed one? The open one has a limit of $4,700 so paying it off would help my utilization for that card. The open one has a interest rate of %14.24 and the closed on has a rate of %8.25. My inclination is to pay the open one off but my gut says the balance on the closed account is a killer. Again, thanks for the help.

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What are the CLs (credit limits) on each card?

Anonymous · ‎08-11-2007

With no derogatory info? I'd leave em alone. Closing them starts the 13 year clock for them to be removed and if they are good histories then they are not likely hurting your scores.

fused · ‎08-11-2007

db23 wrote:
With no derogatory info? I'd leave em alone. Closing them starts the 13 year clock for them to be removed and if they are good histories then they are not likely hurting your scores.

13 year clock??

Anonymous · ‎08-11-2007

@fused111 wrote:
__________________________________________________________________________________
@Anonymous wrote:
Your assumption is correct. All the accounts I mention have zero balances and no derogatory items. I did once close an acount with a balance. Which leads me to another question I have. I have two open credit card accounts with a total balance of around 11,000 ($8,000 and $3,000) and one closed account ($3,000 - all payments have been made on time, no derogatory info, they just pissed me off once and I closed the account on them) I now have enough savings to pay off the big $8,000 CC and one of the $3,000 ones. Which of the two smaller ones should I pay off? The open one or closed one? The open one has a limit of $4,700 so paying it off would help my utilization for that card. The open one has a interest rate of %14.24 and the closed on has a rate of %8.25. My inclination is to pay the open one off but my gut says the balance on the closed account is a killer. Again, thanks for the help.
___________________________________________________________________________________
What are the CLs (credit limits) on each card?

#1 Credit Limit = $12,500. Open account. Balance = 8,000 #2 Credit Limit = 4,700. Open account. Balance = 3,000 #3 Credit Limit = N/A. Closed account. Balance = 3,000 None have derogatory info. I have $11,000 in savings I can use towards these balances. Should I focus on bringing the two open accounts to below 30% utilization and also pay off the closed account? It wasn't until recently I became aware of utilization and stuff like that. I could always afford the payments so I never worried about the balances. I used them for convenience mostly. I was more focused on building my savings. Now I have become more aware of my credit score and also in the process realize i'm dumb to keep paying interest bearing accounts, when I could use some of my savings to pay them down/off.

fused · ‎08-11-2007

@Anonymous wrote:

@fused111 wrote:

__________________________________________________________________________________

@Anonymous wrote:

Your assumption is correct. All the accounts I mention have zero balances and no derogatory items. I did once close an acount with a balance. Which leads me to another question I have. I have two open credit card accounts with a total balance of around 11,000 ($8,000 and $3,000) and one closed account ($3,000 - all payments have been made on time, no derogatory info, they just pissed me off once and I closed the account on them) I now have enough savings to pay off the big $8,000 CC and one of the $3,000 ones. Which of the two smaller ones should I pay off? The open one or closed one? The open one has a limit of $4,700 so paying it off would help my utilization for that card. The open one has a interest rate of %14.24 and the closed on has a rate of %8.25. My inclination is to pay the open one off but my gut says the balance on the closed account is a killer. Again, thanks for the help.

___________________________________________________________________________________

What are the CLs (credit limits) on each card?

#1 Credit Limit = $12,500. Open account. Balance = 8,000 #2 Credit Limit = 4,700. Open account. Balance = 3,000 #3 Credit Limit = N/A. Closed account. Balance = 3,000 None have derogatory info. I have $11,000 in savings I can use towards these balances. Should I focus on bringing the two open accounts to below 30% utilization and also pay off the closed account? It wasn't until recently I became aware of utilization and stuff like that. I could always afford the payments so I never worried about the balances. I used them for convenience mostly. I was more focused on building my savings. Now I have become more aware of my credit score and also in the process realize i'm dumb to keep paying interest bearing accounts, when I could use some of my savings to pay them down/off.

1.) Pay off the closed CC. Closed revolving accounts with balances do factor in util% calculations and ones without balances do not.

2.) Paying the other two cards down to < 30% util will help your scores, 1-9% is ideal and you should see an even bigger increase in your scores.

3.) Are you planning on applying for new credit any time soon? If yes, pay it down, if not take your time. No creditor will ever know you had high util in your past. There is no such thing as util% histories.

For more info on this, click on the thread closing credit cards below in my sig line.

Anonymous · ‎08-11-2007

@fused111 wrote:

@Anonymous wrote:
With no derogatory info? I'd leave em alone. Closing them starts the 13 year clock for them to be removed and if they are good histories then they are not likely hurting your scores.

13 year clock??

From lots of reading around, this is when the CRAs start removing positive closed tradelines that supposedly can stay on your CR indefinitely.