Thanks guys! I'm definitely going to try that loan 'trick'. What have I got to lose? Also, another question for you guys... How long can an account stay at 0 until they close it for no use? It is for this reason that I try to put a minimal recurring payment on each card. I had one of my accounts closed (a store card) but I don't remember the details.
An account can report $0 for many years with no risk of being closed. A key contributor here on the forums is SouthJamaica, and almost all of his many cards report $0 every month. I think he's been doing that for a long time.
There's a difference, however, between a card reporting $0 and the owner not using it. I could use a card quite a lot, then pay it down to $0 a few days before the statement closed, and the issuer would report $0 to the CRA.
The rule for protecting yourself from an issuer closing a card due to inactivity is to use the card periodically. Once every six months appears to be fine and it can be for one small purchase. I collected a lot of case studies at one point for closures due to inactivity and in every case one of two things happened:
(1) The card had never been used even once
(2) The card had not been used for at least 7 months.
Even the 7-month cases were extremely rare and appeared to be confined to Wells Fargo. And if a card is a store card, people report having these stay open sometimes for three years or more with no activity.
If you can remember any details about the closure of your store card, I'd love to hear them.
Well, to be honest I'm not so sure now if the 'trick' CGID proposed is a good fit for me or not... see, I'm in the market for an electronic wheelchair. if the insurance won't come through, I'll have to take out an installment loan on it, so it seems for now I will just pay off my CCs and wait and see
Yup, you have got practical concerns, not the right time to be playing around to serve theoretical ends.
My advice is this:
Pay your CC's down. You want all cards reporting $0 except one. The remaining card should report something small, like $10. Then use the $1 trial at Credit Check Total to see what your three scores are.
If you think you could pay off the wheelchair in a short period of time (< 12 months) then obtaining a fourth card with a 0% introductory rate might be far better than an installment loan.
How much does average age of accounts, though, factor in? Won't I be setting myself back a little bit by opening a 4th card? Shouldn't I just take my lowest card and request a credit increase instead?
You never know if you'll get a CLI.
As far as AAoA goes, it's very simple to figure. You have 3 current accounts on your credit reports (open AND closed) correct? Add up the age of these accounts... for example if they are 2, 5 and 6 years old you have a total of 13 years there, divided by the 3 accounts yields an AAoA of 4.33 years. Decimals are always dropped off and rounded down to the whole number, so AAoA is 4 years. If you add another account instead of dividing 13 by 3 you are dividing it by 4, meaning your AAoA becomes 3.25 years or 3 years. Basically in this example, for scoring purposes your AAoA drops from 4 years to 3 years. Whether or not this would result in a scoring change is debatable. It would take 9 months to achieve a 4 year AAoA after opening this new account.
If you have MORE than 3 accounts, simply use the example I gave above by adding up their ages and dividing by the total number of accounts. The more than you have, the less a new account will impact AAoA.
I have MANY closed accounts. Let's see, a Home Depot, a Walmart, a Belden's jewelers, an old Capital One, and a paid off car loan. Open, I have 3 + my student loans (which I need to start paying down while im still IN school)
Well, tbh, I don't really need any help in the AAoA area, as that is just simple math i only asked because I wasn't sure how heavily my AAoA was weighed.
It depends on what your AAoA is. The higher it gets, the less a 1 year change [which could result from a new account or accounts] impacts it.
What I mean is that an AAoA dropping from 2 years to 1 year is more significant than a 6 dropping to 5, which is more significant than 11 dropping to 10, etc.