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WILL CLOSING OLD CC ACCOUNTS NOT USED ANYMORE HAVE A NEGATIVE EFFECT ON SCORE?

New Visitor

WILL CLOSING OLD CC ACCOUNTS NOT USED ANYMORE HAVE A NEGATIVE EFFECT ON SCORE?

In reviewing my score and open credit card accounts, I realized there are "old" accounts still open and or accounts which will not be used anymore.  These accounts were opened to take advantage of no interest/no payment or low interest rates when buying certain items(furniture, BestBuy, etc.).  My score is high but, I do not want it to take a dive should I close these old accounts out.  Hope someone can answer this for me.
 
Thanks
Message 1 of 5
4 REPLIES
Moderator Emeritus

Depending on your utilization and your history length, cl...

Depending on your utilization and your history length, closing accounts CAN hurt your score.  The FICO model has a high percentage of its calculation based on the length of your credit history.  If these accounts were created say midway through your credit life or later.  Start closing them one at a time with the one most recently opened first and keep an eye on your score for adverse effects
Message 2 of 5
New Member

maybe..

Initially it may drop... If you are strong in score you''ll be ok.. The longer accounts in good standing are open can really help your score... Closing too many will decrease your line of availability, thus dropping your score.. Don't close them just for the sake of closing them.. They won't hurt you to keep them open and dormant..
Message 3 of 5
New Member

old accounts

never close old accounts because they help age your credit history even if its a negative item it still affects your age of credit. i have a old account on my report that was transferred to another company but its still on my credit report making my age of credit 8 years old.
Message 4 of 5
Regular Contributor

This is best demonstrated by example. Let's say you have...

This is best demonstrated by example.

Let's say you have three cards, and the older two you don't use any more. The cards are currently 5, 3, and 2 years old (max age 5 years, average age 3-1/3 years).

If you leave them open, next year, you'll have a maximum age of six years, and an average age of 4-1/3 years.

If you leave them open for five years, you'll have a maximum age of ten years, and an average age of 8-1/3 years.

Let's say you closed the older two now. Average age seems to count more heavily for open accounts, so your age would drop to 2 years.

In five years, your maximum open account would be 7 years old, and your average age would be 7 years.

For a more complicated example, let's say you opened a new card in year 4 and we're looking at year five.

All four accounts open: max age: 10 years, average age (10 + 8 + 7 + 1)/4 = 6.5 years.

If you'd closed the two older accounts: max age 7 years, average age (7 + 1)/2 = 4 years.

While it might not seem like a lot, 10 years is 43% longer than 7 years. 6.5 years is 63% longer than 4 years. These do translate to score differences.
Message 5 of 5