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Regular Contributor
honeybrook1
Posts: 167
Registered: ‎06-18-2007

Re: Closing Aged Accounts.. Yes It Is Ok

So...should I close an account that just popped up on my EQ report yesterday from Hurley State Bank?  It's a positive TL...not sure where it's from, though I think I remember that Radio Shack cards are issued with them.  My Radio Shack has been paid off for more that 5 years, though, so I don't know why it would pop up now.  Should I dispute it and tell them to close it, even if it positive?

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New Visitor
freshmeat
Posts: 1
Registered: ‎09-20-2007

Re: Closing Aged Accounts.. Yes It Is Ok

I have 2 open CC from Chase (10+ years old) which hasn't really been used in years. I recently got an offer for a zero percent balance transfer CC from Chase and wanted to consolidate the cards in order to combine and raise the credit limit. From my understanding, when I combine the older cards into this new one, the 2 old CCs will be closed. Based on what I understand so far, I believe that my card utilization percentage would stay the same since my credit limit adds up to the the same amount and I am just shifting the balance from one account to another. I am just worried about closing the aged CC accounts. I wanted to get feedback on if this merging of cards will have a negative impact on my credit score. Thanks in advance.
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firecat
Posts: 1
Registered: ‎02-28-2008

Re: Closing Aged Accounts.. Yes It Is Ok

My question is in relationship to "old accounts."  When exactly do these old accounts come off, if ever?  Does one have to request this thru EX, EQ or TU?  Or should this automatically happen?  We have some "old" credit that had some 30+, 60+ days late on it and would like to see it disappear.  Does the amount of time start from the date the account was opened or from the last date it was late? 
Thanks,
Firecat
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Epic Contributor
haulingthescoreup
Posts: 28,115
Registered: ‎04-01-2007

Re: Closing Aged Accounts.. Yes It Is Ok



firecat wrote:
My question is in relationship to "old accounts."  When exactly do these old accounts come off, if ever?  Does one have to request this thru EX, EQ or TU?  Or should this automatically happen?  We have some "old" credit that had some 30+, 60+ days late on it and would like to see it disappear.  Does the amount of time start from the date the account was opened or from the last date it was late? 
Thanks,
Firecat



Derogatories will report for 7 years after they happened. The account itself will report for 10 years after it closed.
* 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
Senior Contributor
smallfry
Posts: 4,831
Registered: ‎04-20-2007

Re: Closing Aged Accounts.. Yes It Is Ok



freshmeat wrote:
I have 2 open CC from Chase (10+ years old) which hasn't really been used in years. I recently got an offer for a zero percent balance transfer CC from Chase and wanted to consolidate the cards in order to combine and raise the credit limit. From my understanding, when I combine the older cards into this new one, the 2 old CCs will be closed. Based on what I understand so far, I believe that my card utilization percentage would stay the same since my credit limit adds up to the the same amount and I am just shifting the balance from one account to another. I am just worried about closing the aged CC accounts. I wanted to get feedback on if this merging of cards will have a negative impact on my credit score. Thanks in advance.


You will get dinged for a new account. How much your score drops depends on you file.
Member
ChumChurum
Posts: 46
Registered: ‎08-07-2007

Re: Closing Aged Accounts.. Yes It Is Ok



Tuscani wrote:
[...]
 
Lets recap... In the short term, the only harm by closing a revolving account is due to the utilization percentage you lose, while over the long term, a closed account will be removed from your credit file after 10 years, which could lower your score due to the loss of history.
 


Interesting conclusion, especially given the title.  Someone reading the title might believe that it is a good idea to close an account.  Yet, the conclusion reached is diametrically opposite.
 
May I suggest changing the title of the thread?
Member
sonicblue
Posts: 5
Registered: ‎02-29-2008

Re: Closing Aged Accounts.. Yes It Is Ok

All things being equal, I've done the math (not a score, just on average age), and it is to your benefit (forgetting util) to close any account whose age is LESS than your overall average age of account.  Think about it, t=0: you have three accounts, ages 10, 8 and 3 years.  The average age is 7 years.  Ten years from now, t=10, they'll be 20, 18 and 13 years old, for an average age of 17 years.
 
If at t=0 I close the 3 year-old account, the current average age doesn't change since they don't fall off.  But at t=10, the then-13-year-old account will drop off, and my average age of account will be 19 years.  This is an increase over the 17 years had I done nothing.
 
I think the argument against is, it's a safe bet that at SOME point in that ten years, you will probably have opened something new.  At an extreme, let's say you open two accounts right at t=10.  Your account ages will be 20, 18, 13, 0 and 0, for an average age of 10.2.  If I had closed that account, it then falls off at t=10, leaving 20, 18, 0 and 0, an average of 7.6.
 
In the end, it seems like it's not worth it to close accounts.  Keep the util, keep the history.  If you're worried about fraud, call the companies and put a freeze on the account.  If you really want to close accounts, close ones you've opened VERY recently, and if you're going to open anything new, do it asap.  The longer you wait into the ten-year drop-off window, the more it may potentially hurt you later.
Moderator Emeritus
cheddar
Posts: 6,794
Registered: ‎09-29-2007

Re: Closing Aged Accounts.. Yes It Is Ok



sonicblue wrote:
All things being equal, I've done the math (not a score, just on average age), and it is to your benefit (forgetting util) to close any account whose age is LESS than your overall average age of account.  Think about it, t=0: you have three accounts, ages 10, 8 and 3 years.  The average age is 7 years.  Ten years from now, t=10, they'll be 20, 18 and 13 years old, for an average age of 17 years.
 
If at t=0 I close the 3 year-old account, the current average age doesn't change since they don't fall off.  But at t=10, the then-13-year-old account will drop off, and my average age of account will be 19 years.  This is an increase over the 17 years had I done nothing.
 
I think the argument against is, it's a safe bet that at SOME point in that ten years, you will probably have opened something new.  At an extreme, let's say you open two accounts right at t=10.  Your account ages will be 20, 18, 13, 0 and 0, for an average age of 10.2.  If I had closed that account, it then falls off at t=10, leaving 20, 18, 0 and 0, an average of 7.6.
 
In the end, it seems like it's not worth it to close accounts.  Keep the util, keep the history.  If you're worried about fraud, call the companies and put a freeze on the account.  If you really want to close accounts, close ones you've opened VERY recently, and if you're going to open anything new, do it asap.  The longer you wait into the ten-year drop-off window, the more it may potentially hurt you later.


Probably one of the most insightful first posts I've ever seen.
 
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Member
ChumChurum
Posts: 46
Registered: ‎08-07-2007

Re: Closing Aged Accounts.. Yes It Is Ok



sonicblue wrote:
All things being equal, I've done the math (not a score, just on average age), and it is to your benefit (forgetting util) to close any account whose age is LESS than your overall average age of account.  Think about it, t=0: you have three accounts, ages 10, 8 and 3 years.  The average age is 7 years.  Ten years from now, t=10, they'll be 20, 18 and 13 years old, for an average age of 17 years.
 
If at t=0 I close the 3 year-old account, the current average age doesn't change since they don't fall off.  But at t=10, the then-13-year-old account will drop off, and my average age of account will be 19 years.  This is an increase over the 17 years had I done nothing.
 
I think the argument against is, it's a safe bet that at SOME point in that ten years, you will probably have opened something new.  At an extreme, let's say you open two accounts right at t=10.  Your account ages will be 20, 18, 13, 0 and 0, for an average age of 10.2.  If I had closed that account, it then falls off at t=10, leaving 20, 18, 0 and 0, an average of 7.6.
 
In the end, it seems like it's not worth it to close accounts.  Keep the util, keep the history.  If you're worried about fraud, call the companies and put a freeze on the account.  If you really want to close accounts, close ones you've opened VERY recently, and if you're going to open anything new, do it asap.  The longer you wait into the ten-year drop-off window, the more it may potentially hurt you later.


Yet another post where opening arguments start w/ advocating one thing, but a totally different conclusion is reached.
 
First, most people don't have the foresight to plan that afar ahead.  At the 13th year, when the closed account finally drops off the report (does it, though? or will it?), the 13 year old account is going to be very, very, very valuable.  99% of the consumers are going to look back and regred closing it.  Trust me on this.
 
Second, beyond, say 760 or 770, your score does not give you any tangible benefits.  So suffering through credit-celibacy just to increase the average age to more than 5-6 is totally unnecessary IMO, and probably costly in the long run.  There will always be some good opptys for credit, whether it is a new 5% reward card, some mega-benefit that you really want, or some other program, which will tip your decision in favoring of applying for credit.
 
Member
sonicblue
Posts: 5
Registered: ‎02-29-2008

Re: Closing Aged Accounts.. Yes It Is Ok

Maybe I should have bolded my very first phrase: "All things being equal."  That is the base assumption throughout, and pervades my interim conclusion of, you should close accounts less than your current average age.  However, I then made a key change to that assumption, namely, that you open something new along the way, and I further stated that it was somewhat likely that would happen.  In light of that revision, I then concluded you probably shouldn't close accounts.
 
Perhaps more strategic bolding on my part - and maybe less contradictory bolding on your part - would have made my point clearer, and shown that the post was actually quite thorough and consistent.

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