Wouldn't closing an account help my overall score?

[HiLine]

And how frequent is considered "usual" in your book?

Check out a survey I started last year: http://ficoforums.myfico.com/t5/Credit-Cards/Survey-reporting-of-closed-credit-cards/m-p/3690017#M10...

Most did not report for that long.

[PCR20]

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@Ysettle4 wrote:
You partially correct but only on the way AAoA is calculated. When FICO calculates overall credit availability, it looks at how much credit is available in total, not an average of available credit per account

So with your scenario, if you closed your discover account, yes, your AAoA would increase and you seem to be in no danger with total available credit because you'd only lose $2K out of $44K - provided that your utilization is very low.

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Just curious about being partially correct. Was the part about the average CL incorrect?

According to what I get in my monthly FICO Statement direct from Experian, #7 of the 8 they list says:

" 7. Your average credit card limit is more than $5,000.
Lenders recognize that with higher credit limits comes increased responsibility, and that you have managed to build strong relationships with other lenders. Your relatively high credit limits signal to lenders that you are a trustworthy candidate for new lines of credit."

 Also, if I use just the open cards they list on my report, the AAoA comes out to 7 Years 8 Months (rounded to the nearest month)

This is the same as they mention in item #6 below.

I'm thinking they only use the open cards else the AAoA would be much higher.

Either way, this is only an experiment to see what effect it is going to have to close the useless Discover Card.

I'm not planning on using any credit anytime soon, so now is the time to see what happens.

I appeciate the responses and realize that they are the opinions of the thoughtful people on this open forum, and come with no guarantees.

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The entire list says:

  1. You have never missed a payment.

You have done a great job at making all of your payments on time. The purpose of a credit score is to help lenders predict whether or not you will miss payments in the future, so keeping your record clean is a very positive factor.

  2. You do not have any maxed-out credit cards.

Credit cards are considered "maxed-out" when you have spent 90% or more of the credit limit. Lenders view you as someone who uses their credit responsibly and spends only what they can afford.

  3. You have two or more open credit cards.

Credit Cards allow you to both spend money and decrease debt; unlike mortgages or installment loans where you only decrease debt. Lenders like to see multiple credit cards on your credit report, because they are able to use them to better determine your ability to manage your spending.

  4. Your mortgage is in good standing.

Lenders recognize that obtaining and maintaining a mortgage requires more skill and discipline than other account types. This makes them more confident in your ability to take on new accounts and still meet your financial obligations.

  5. You do not have any Public Records.

You do not have any Public Records (i.e. bankruptcies, tax liens, and court judgments) on your credit report. Lenders see these issues as major barriers to extending additional credit.

  6. Your average age of accounts is more than 7 years and 8 months.

Lenders use credit reports and credit scores to predict whether or not you will meet future financial obligations. Having a longer credit history gives them more information to base those predictions on, and increases their confidence in you overall.

  7. Your average credit card limit is more than $5,000.

Lenders recognize that with higher credit limits comes increased responsibility, and that you have managed to build strong relationships with other lenders. Your relatively high credit limits signal to lenders that you are a trustworthy candidate for new lines of credit.

  8. You have no negative factors

Credit scores are calculated based on various factors in your credit report. Currently, your credit report does not show any significant negative or derogatory information.

[Anonymous]

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@HiLine wrote:
And how frequent is considered "usual" in your book?

Check out a survey I started last year: http://ficoforums.myfico.com/t5/Credit-Cards/Survey-reporting-of-closed-credit-cards/m-p/3690017#M10...

Most did not report for that long.

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Ok, "up to" ten years.

The point of my original post was to point out that closed accounts count in aaoa.

[HiLine]

I got that. Sorry for nitpicking on you, but I felt the need to point out that the 10 year rule is not to be counted upon. A slight change in wording can make a world of difference.

[Ysettle4]

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@TCarson wrote:

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@Ysettle4 wrote:
You partially correct but only on the way AAoA is calculated. When FICO calculates overall credit availability, it looks at how much credit is available in total, not an average of available credit per account

So with your scenario, if you closed your discover account, yes, your AAoA would increase and you seem to be in no danger with total available credit because you'd only lose $2K out of $44K - provided that your utilization is very low.

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Just curious about being partially correct. Was the part about the average CL incorrect?

According to what I get in my monthly FICO Statement direct from Experian, #7 of the 8 they list says:

.

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Correct. The FICO model only looks at credit availbility as a whole regardless of how the CRA's display the data (overall credit availibilty, averge credit limit, etc.).

Experian is using an average per card value as a means to give you a different view point.

[jamie123]

You have nothing to gain by closing the Discover card and would only lose in the long run. The card is already 2 years old and that is considered an "old" account in the credit world. I know it's not 10 years old but what would you replace it with? Another new card?

The credit line can be raised over time. You need to CALL them and ask for a credit line increase! Some of my CLI buttons don't work with my lenders either. I received an "auto credit line increase isn't available for this account" a couple of times. I called up and asked for double my current CL and was approved both times that I did this. You can call and ask for a CLI every 6 months but I would suggest doing it only once per year to get the best results. Ask for an increase that would double your current CL. THEY WILL GIVE IT TO YOU!

[PCR20]

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@jamie123 wrote:

You have nothing to gain by closing the Discover card and would only lose in the long run. The card is already 2 years old and that is considered an "old" account in the credit world. I know it's not 10 years old but what would you replace it with? Another new card?

The credit line can be raised over time. You need to CALL them and ask for a credit line increase! Some of my CLI buttons don't work with my lenders either. I received an "auto credit line increase isn't available for this account" a couple of times. I called up and asked for double my current CL and was approved both times that I did this. You can call and ask for a CLI every 6 months but I would suggest doing it only once per year to get the best results. Ask for an increase that would double your current CL. THEY WILL GIVE IT TO YOU!

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Thanks for the positive thought, but I have no use for Discover.

I feel they did me wrong by offering up a "Pre-Approved Card" just to give me the shaft with a low limit and uber high Interest.

FWIW, I did try calling them after one year and after climbing up the phone chain they said something along the lines of "I'm sorry, but I can't tell you why you do not qualify for an Limit Increase" .

If, when I call tomorrow they offer me a CLI to over $10K with only a SP, I'll keep it open (fat chance of that). 

Overall, this is more along the lines of "Let's See" if our assumtions are correct.

Whoever gets it right gets to say "I told you so", so the stakes are pretty high.

I'm betting on closing it will cause a bump to reach my goal.

If I'm wrong, I'll post it here and take my "I told you so's"

[jamie123]

It seems to me, and I'm sure this is NOT always the case, but most lenders will usually only double your existing CL with a soft pull. Once you go above "double your existing limit", they want a hard pull.

[Anonymous]

 In regards to AAoA on closed accounts..... There's an easy way to know if it's being calculated... If it's an OC and it's on your reports.... It's calculated in your AAoA. The "10 Years" simply refers to how long the account will stay on your report. 

To the OP... If you don't have use for the card by all means close it.... But there are other things besides AAoA you benefit from keeping it. Payment History being the most important.  And the lower utilzation being the other... Both significantly more important than AAoA. Let's say in 3 years a CA pops up on your reports.... You'll be glad you had that extra 60 months of Pays as Agreed on your reports I assure you.

[HiLine]

The OP has made up his mind. Just saying.