Moderator Emeritus
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.

Welcome to the FICO forums!

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