Understanding FICO® Scoring

[Tuscani]

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masdeocho wrote:

OK, tell me if I've got this right:

Say I have a five-year old card.  I close it today.  Two years from today, does it count towards my history as a seven-year old card?  It's not frozen in time today when I close it as a five-year old? 

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Yes, it counts towards your history as a seven year old card. And the 10 yr clock for its removal begins on the date you closed it, not when it was opened.

[Viking]

Last week I disputed ownership of a revolving Citibank CC with Equifax and my ScoreWatch went up 7 points. This card apparently was opened on 11/2000 and closed on 12/2000 with 1 month reviewed. In a previous post, it was stated the length would be counted as a 7 years. However, a  7 point upward jump leads me to believe this statement is not the whole story. ScoreWatch directly attributed the change to this dispute. No other credit info changed. Thoughts?

[Tuscani]

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Viking wrote:

Last week I disputed ownership of a revolving Citibank CC with Equifax and my ScoreWatch went up 7 points. This card apparently was opened on 11/2000 and closed on 12/2000 with 1 month reviewed. In a previous post, it was stated the length would be counted as a 7 years. However, a  7 point upward jump leads me to believe this statement is not the whole story. ScoreWatch directly attributed the change to this dispute. No other credit info changed. Thoughts?

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There are some things FICO will not calculate while a TL is in dispute. That would explain the fluctuation.. not that fact that you closed an account (assuming the bal was $0 of course).

[Brammy]

Other than the utilization factor, the only problem I see is that once the trade line is purged from your reports, it can seriously reage your credit history if you had not opened other accounts within a short period of time.

I have seen old closed accounts fall off due to age and significant score drops when a person had not applied for credit for a numebr of years between that old one and the next oldest one.  My current file is only 9 years old (putting it into the class of a young file) and I have had credit for a little over twenty years, my old info has since fallen offf and there was a long period of time, maybe ten years where I did not app for any new credit.  My current oldest accounts may start falling off in the next two years as they are installments, and those only show up on one bureau.

Message Edited by Brammy on 08-17-2007 09:45 AM

[andyaycw]

So if I have understood this thread correctly...would I be correct in assuming that closing a newly opened account would NOT hurt my FICO score? Newly opened as in the past month...and my credit history is only one year.

[smallfry]

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andyaycw wrote:
So if I have understood this thread correctly...would I be correct in assuming that closing a newly opened account would NOT hurt my FICO score? Newly opened as in the past month...and my credit history is only one year.

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Not much if at all but you never really know till you do it.

[haulingthescoreup]

Yes, it counts towards your history as a seven year old card. And the 10 yr clock for its removal begins on the date you closed it, not when it was opened.

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OK, just when I think I'm grasping things... I have one truly disastrous account, a J.Crew card opened 12/2004. It is a bit younger than my overall average credit age. If I leave it open (and unused!), it will fall off in 12/2014. (The so-called 10 yr clock.) But if I were to close it tomorrow, it wouldn't fall off until 9/2017? And why ten years, rather than seven? Or do the baddies within the account vanish after 7 years, while the account stays on for a total of ten years?

I know that the derogatories stay on whether open or closed, but the credit limit is relatively low and shouldn't affect my utilization (total CL $12,250, $0 balance, getting ready to put piddly-squat balances on my cards.)

So 10 years from opening or from closing? Or 7 years from opening or closing? aaarghhh

[Tuscani]

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haulingthescoreup wrote:
Yes, it counts towards your history as a seven year old card. And the 10 yr clock for its removal begins on the date you closed it, not when it was opened.

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OK, just when I think I'm grasping things... I have one truly disastrous account, a J.Crew card opened 12/2004. It is a bit younger than my overall average credit age. If I leave it open (and unused!), it will fall off in 12/2014. (The so-called 10 yr clock.) But if I were to close it tomorrow, it wouldn't fall off until 9/2017? And why ten years, rather than seven? Or do the baddies within the account vanish after 7 years, while the account stays on for a total of ten years?

I know that the derogatories stay on whether open or closed, but the credit limit is relatively low and shouldn't affect my utilization (total CL $12,250, $0 balance, getting ready to put piddly-squat balances on my cards.)

So 10 years from opening or from closing? Or 7 years from opening or closing? aaarghhh

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The 10 years begins when you close the account. The seven year rule applies to derogatory information. So let's say you closed this account today but you had a 30 day late back in 2005. The late would be removed 2012 but the account would not be removed from your reports until 2017. Make sense? 

[haulingthescoreup]

As much as anything does! --thanks

[smallfry]

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Brammy wrote:

Other than the utilization factor, the only problem I see is that once the trade line is purged from your reports, it can seriously reage your credit history if you had not opened other accounts within a short period of time.

I have seen old closed accounts fall off due to age and significant score drops when a person had not applied for credit for a numebr of years between that old one and the next oldest one. My current file is only 9 years old (putting it into the class of a young file) and I have had credit for a little over twenty years, my old info has since fallen offf and there was a long period of time, maybe ten years where I did not app for any new credit. My current oldest accounts may start falling off in the next two years as they are installments, and those only show up on one bureau.

Message Edited by Brammy on 08-17-2007 09:45 AM

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I don't think there would be too much penalty for your situation where your score is concerned. Might be the difference between 780 and 800. Maybe if that much.