Deleting old accounts/improvement on fico score

[Chris_A]

Hello Community!

Sorry if this has already been asked, but I'm currently trying to establish a good line of credit, and in doing so I have been paying on my car, and credit card(s) on time.

I have not missed a payment!  With me mentioning this.  I had a lot of old accounts deleted, and still doing so till this day.  In this year alone I had at least seven accounts deleted between all three bureaus, but what bothers me the most is Equifax has the least amount act(s), and is the lowest of the three! Why?!  With each deletion of these act(s) I've seen some good increases in my score but not Equifax.  I'm trying to buy a house like everyone of us out here, and what I'm getting at is do your fico score go up when you delete old act(s) or any act(s) or does other things factor in this? I have two good standing act(s) backing me you up, or do I need to acquirer another line of credit? If I have close to nothing negative on my credit history but low score even with paying two act(s) will lenders still work with me?

[HoldingOntoHope]

If the accounts are in good standing (No negatives), then you do not want them deleted. If the accounts had negative information such as late payments or charge offs then deleting them is probably better for your FICO scoring right now.

FICO takes a number of factors into consideration in scoring and mix of credit and age of accounts is part of those factors. The scoring algorithm looks at both the oldest account in your file and the Average Age of Accounts. The older these are the better for you. FICO also looks at a credit mix such as do you have both revolving and installment accounts. Your car loan and credit cards work as a positive in this case.

Your on time payments is one of the biggest scoring factors but utilization or amount of your revolving credit line being used (as reported on your monthly statement) is also a big factor. You mentioned that you have "close to nothing" negative on your reports. I know my biggest gain in scoring came when my reports were completely clean. Negative information effects can fade over time but some effect will usually remain.

I would suggest that if you haven't already that you purchase your FICO scores on this site. There will be a section on what's helping and what's hurting your score. Concentrate on the second part for best results. It will list items in order of importance. That and a lot of reading in the forums will give you all the credit education you need to move forward. And there is almost always friendly and supportive advice when you have questions.

Welcome to the forums.

[RobertEG]

+1

I would add that, in addition to pure FICO scoring implications, if/when a creditor does a manual review of your CR, and it is all they have available, the absence of closed accounts also equals an absence of showing of their prior credit history.  For example, 'spose you had all closed credit cards deleted from your CR, and only had one open card.  That, on its face, is a thin showing of prior handing of discretionary credit, when in fact the consumer may have had dozens of good, clean accounts.

That might be viewed as inability of the consumer to obtain prior revolving credit, or may be viewed as little history of showing of effective use of discretionary, revolving credit.

Additionally, some flavors of FICO scoring, such as auto industry FICOs, place more emphasis on showihg of effecitve accounts of the variety of credit being sought.

Deletion of all prior auto installments would not be helpful.

You can, of course, always take old account records to your prospective mortgage lendor and show prior handling of different types of credit, but its better to have it in your CR,

It is usually best, when askiing for deletions, to request deletion only of unexcluded negative items, and not the entire account.

The accounts wll then appear, on CR review, the same as if they were clean throughout.

[takeshi74]

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@Chris_A wrote:

what bothers me the most is Equifax has the least amount act(s), and is the lowest of the three! Why?! 

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No idea.  You haven't provided enough information for us to even begin to attempt to answer your question. You need to consider your entire credit picture -- not just number of accounts.

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@Chris_A wrote:

what I'm getting at is do your fico score go up when you delete old act(s) or any act(s) or does other things factor in this?

Again, it's never just one factor or simple cause and effect by itself affecting your credit.  It's the same usual suspects as always.  Deleting negative accounts will help.  Deleting positive accounts will not help.

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@Chris_A wrote:

I have two good standing act(s) backing me you up, or do I need to acquirer another line of credit? If I have close to nothing negative on my credit history but low score even with paying two act(s) will lenders still work with me?

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Number of accounts is one of the other factors considered. Are you sure you only have 2 accounts (open and closed)? If so, you'll definitely want to have more on your report -- otherwise your report will appear thin and many lenders will not look favorably upon it.

[guiness56]

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@HoldingOntoHope wrote:

If the accounts are in good standing (No negatives), then you do not want them deleted. If the accounts had negative information such as late payments or charge offs then deleting them is probably better for your FICO scoring right now.

FICO takes a number of factors into consideration in scoring and mix of credit and age of accounts is part of those factors. The scoring algorithm looks at both the oldest account in your file and the Average Age of Accounts. The older these are the better for you. FICO also looks at a credit mix such as do you have both revolving and installment accounts. Your car loan and credit cards work as a positive in this case.

Your on time payments is one of the biggest scoring factors but utilization or amount of your revolving credit line being used (as reported on your monthly statement) is also a big factor. You mentioned that you have "close to nothing" negative on your reports. I know my biggest gain in scoring came when my reports were completely clean. Negative information effects can fade over time but some effect will usually remain.

I would suggest that if you haven't already that you purchase your FICO scores on this site. There will be a section on what's helping and what's hurting your score. Concentrate on the second part for best results. It will list items in order of importance. That and a lot of reading in the forums will give you all the credit education you need to move forward. And there is almost always friendly and supportive advice when you have questions.

Welcome to the forums.

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I would not remove an account simply due to late payments, unless they are extensive.  For example, a 60 day late loses impact after about 2 years and they will be removed 7 years from their date of occurence.  Once the last one is removed the account turns positive again and will remain for up to 10 years from date closed.