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hellogoodcredit
Posts: 1
Registered: ‎07-31-2013
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Oldest Account - Credit versus Student Loan

I've read that closing your oldest account like shorten the average length of your account thus lowering your credit score.... but is this the same if it's a credit card versus a student loan??

 

Oldest Accounts:

Student Loan - Opened 2004

1st Credit Card -  Opened 2009

 

Will closing the credit card benefit or damage my score? 650 on CreditKarma

 

Thanks,

Bob

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CreditBob
Posts: 498
Registered: ‎05-01-2007
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Re: Oldest Account - Credit versus Student Loan

The credit card, being your revolving account, will have more of an impact than the student (installment loan). Keep the credit card account open. So use it each month & pay it off.

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llecs
Posts: 32,869
Registered: ‎08-04-2007
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Re: Oldest Account - Credit versus Student Loan

I'll also add that closed accounts still factor into your length of history and average age of accounts. So closing them won't impact your length of history in the interim. However, around 10 years from the date of closure/loan payoff they'll typically disappear from your reports and there could be an impact at that time.

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bigcred
Posts: 1
Registered: ‎08-01-2013
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Re: Oldest Account - Credit versus Student Loan

Good to know.

 

Would this rule (CC debt > installment loan) be true if it was a mortgage. When does magnitude factor into this? Let's assume the credit card limit is 10,000 and the mortgage is for 50,000 or 500,000. Will the later take precedence in calculating the score?

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llecs
Posts: 32,869
Registered: ‎08-04-2007
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Re: Oldest Account - Credit versus Student Loan

Balance amount is very minor in relation to revolving util percentage. Even installment util is super minor. For example let's say you add $10k in debt on limits of $10k on your CCs. You'd take a major hit off the percentage (100%). Conversely, let's say you add $10k in CC debt on a combined limit of $100,000. The damage would be much, much less (very small impact). Revolving util is also scored apart from installment util. They are never combined. And that's a good thing. You won't get dinged in a big way by adding a $500k mortgage. FICO does have a separate scoring component that looks at balance amounts, but the impact from that is very minor in relation to the % util on revolving.

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pizzadude
Posts: 9,674
Registered: ‎01-28-2010
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Re: Oldest Account - Credit versus Student Loan

Here's a link on closing CCs that might be helpful:

http://ficoforums.myfico.com/t5/Credit-Cards/Closing-Credit-Cards/td-p/347190
March2010 FICO® ~ 695 TU, 653 EQ, 697 EX

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