My wife was added by her father as an AU in 1993 on a AT&T Universal CC. To date the CL is $6300 (her highest TL) and it was also her oldest TL (by 4 years) with 0 lates. Unfortunately, dad-in-law always kept util% between 90 and 101% for the last 6 months or longer. My wife's other TLs totaled $2900 in all other CCs.
So, our dilemma was: to cancel or not to cancel. Well we disputed via TU and EX yesterday and already TU updated her reports and the before and after FICOs are in.
Why did we delete? According to FICO, 10% of the scores goes to length of credit history and 30% towards amount of debt. We figured that over 65% of all revolving debt would come from that card alone. Since we had no control at all the util% of the AT&T card, well it became a no-brainer.
To preface this, DW's util% with the ATT card on 12/31/07 was 88%. The ATT card alone was over 97%. The TU FICO score on 12/31 was...590. The TU FICO score on 1/9/08 is ...579.
The util today without AT&T is 86%. We went into debt before Christmas and sent payments on the 1st. Only one of 6 was reporting that. Util today is really around 45%. Also, as a side note, DW has a CapOne CO listed with a balance of $736 with a CL of $250. This account is absolutely factored into util%. I want this off but SOL ends this summer. Even if we bring all of her balances to $0, the lowest util% would ever go to is 24%!!!
OK, this is very much a guess here, but I think that any benefit you would have seen by getting that horrible util off is masked by the fact that the legitimate util is still way too high. So all that was really left was the loss of the history. (Since it was an AU account, she didn't get to hang on to it for 10 years.) So good (losing AT&T util) + bad (keeping rest of util) + bad (loss of age of account) = net bad.
The good news, of course, is that once the real util comes down, you won't have that one account dragging everything down forever. The cure for this one is going to be time, and continued paydown, I'm afraid. But in a few months, you are going to be so relieved to not have that ticking time bomb on her reports!
* Credit is a wonderful servant, but a terrible master. * Who's the boss --you or your credit? FICO's: EQ 781 - TU 793 - EX 779 (from PSECU) - Done credit hunting; having fun with credit gardening. - EQ 590 on 5/14/2007
haulingthescoreup wrote: OK, this is very much a guess here, but I think that any benefit you would have seen by getting that horrible util off is masked by the fact that the legitimate util is still way too high.
Yep. I wish I waited until the payments posted to see the change. I'm scheduled to pull our reports again next week and again at the end of the month. It'll be interesting to see what affect util has on her scores. However, I have no regrets doing this for DW. FICO08 could have changed this anyway and util hovering around 100%, there was a prospensity of lateness on the in-law's part.
Basically the 11 point drop was a result of the account aging versus util. Basically it only changed from 88% to 86% after the change. However, oldest account went from 14 yrs to 10 yrs and the avg age went from 4 to 3. This serves as a warning for those who close perfectly good, aged accounts. Imagine someone who never saw these forums and closed 4-5 of these accounts due to bad advice.