topic Re: Should I keep my Merrick cards open? in Understanding FICO® Scoring

Should I keep my Merrick cards open?

Anonymous — Wed, 02 Nov 2016 16:59:39 GMT

I have two Merrick cards, about 8 and 9 years old, I've always been on time for both. Credit lines of $1750 and $1500. Monthly services charges of $4 and I rarely manage to get the balance at zero in time to report. No balances otherwise. Other than those, I have a Slate with a $5k CL, Amex with $3k and Walmart store card with $5k. All are under a year old. Zero balances on Amex/WM and about $1000 on Slate. Is keeping those older cards open really beneficial?My AAoA is 13.5 years due to student loans I did not pay on for many years. Does that number matter more than AAoA for my credit cards? Or should I keep them open and just try like hell to get the $4 paid after they charge and before they report (which seems to be the same day). Is that tiny balance really hurting me? I do not care about the $8 a month, I care about the freaking cards never reporting at zero.

Re: Should I keep my Merrick cards open?

Anonymous — Wed, 02 Nov 2016 18:01:28 GMT

Your AAoA won't go down if you close them. It would bug the heck out of me to pay those monthly fees for card I don't need or use. I would call them and ask if they will waive the fees from now on, and if they don't- hasta la vista, baby.

Re: Should I keep my Merrick cards open?

Anonymous — Wed, 02 Nov 2016 20:18:37 GMT

Your checking account probably has a no-cost "bill pay" feature. You put in the name of a creditor (it could be an electric company, a water company, a credit card company like Chase or Citi, etc.) and your account number with that creditor. Then you tell Billpay how much you want to send to that account and on what date.

Suppose your $4 fee typically posts on the 19th and then the statement cuts on the 19th or 20th. You could set up Billpay to push $4 into that Merrick card on (say) the 14th every month. That will cause it to have a balance of -$4 and then when the $4 fee posted it would go back to $0. The $0 amount would be appear on the statement and would be reported to the credit bureaus.

That said, I am very much in agreement with Sheridan. You are paying $100 a year for cards you do not use and which give you no credit scoring benefit. Say goodbye!

Re: Should I keep my Merrick cards open?

Anonymous — Wed, 02 Nov 2016 21:03:04 GMT

Thank you! They are closed!

Re: Should I keep my Merrick cards open?

Anonymous — Mon, 14 Nov 2016 18:05:06 GMT

....and my FICO 8 scores are down by an average of 6 points with only one of the two reporting closed. This was not such a swell idea afterall, apparently.

Re: Should I keep my Merrick cards open?

Anonymous — Mon, 14 Nov 2016 18:41:51 GMT

Can you list all of your credit cards, with the amount owed and the credit limit?

Indicate which of these were just closed.

All of this should be based on the figures as they appear on the actual report. Knowing this may give us some insight into what is happening.

If your total utilization increased, or if the number of open cards reporting a $0 balance decreased, then you might have a score drop. After you close the Merrick cards, you will have three open cards, which is enough to have a very high score. You can still maximize it when you need to by making sure that all cards report $0 except one (which should report something small).

Closng the cards could not have affected your AAoA. But of course it does affect your total credit limit, etc.

Re: Should I keep my Merrick cards open?

Anonymous — Mon, 14 Nov 2016 18:59:31 GMT

Open Amex balance $0 CL $1000 (recently increased to $3000, not reported yet)

Open Chase balance $394 CL $5000

Open Walmart balance $0 CL $6000

Open Fingerhut (woot) balance $0 CL 400

Open Merrick balance $4 CL $1200

Closed Merrick balance $3 CL had been $1750

I can't wait to see what the other one closing does to me. Or how this affects the mortgage scores for which I was trying valiantly to get my midpoint up 3 points. :/

Re: Should I keep my Merrick cards open?

Anonymous — Mon, 14 Nov 2016 19:03:48 GMT

It shouldn't effect you too much. I've always been under the understanding that credit cards remain reporting for 10 years. And I wouldn't worry about getting a mortgage, I'm sure everything will work out. Just think, that $8 you're saving a month can go towards your new mortgage!

Re: Should I keep my Merrick cards open?

Anonymous — Mon, 14 Nov 2016 19:44:20 GMT

It sounds like you have a closed card reporting a $3 balance. (The newly closed Merrick card.) Hopefully the card will get cleared up so that it reports a $0 balance. Not sure whether closed revolving accounts with positive balance could affect one's score.

Aside from that, your total utilization is still extremely low and most of your cards have a $0 balance. So you aren't taking a hit there. My guess is that it is just noise. Something else on your profile and changed and the score change was picked up by the card closing. Nonetheless the card closing didn't cause the score drop.

PS. Given that you are about to buy a house, you might have gotten some slightly different advice if you had let people know that fact before you decided to close the cards. In principle there is no reason it should affect your score -- though it was always possible that the issuer might delete your account rather than report it closed (which could have a significant effect).

At any rate, shortly before you buy a house is probably not a good time to experiment with changes to your profile. Better would have been to use the alternative advice I gave you of pushing $4 into each card via Billpay about a week before the statement date. Then when you buy your house, you could play around with cancelling the cards.

Re: Should I keep my Merrick cards open?

Anonymous — Mon, 14 Nov 2016 21:04:47 GMT

If you had stated that you were in the process of getting a mortgage, I woudn't even have commented on this thread. Gotta mention things like that, don't you think? That being said, your scores should come back quickly if you use the time tested formula of having only one card reporting a small balance.

Re: Should I keep my Merrick cards open?

Revelate — Tue, 15 Nov 2016 18:58:49 GMT

@Anonymous wrote:
....and my FICO 8 scores are down by an average of 6 points with only one of the two reporting closed. This was not such a swell idea afterall, apparently.

Closed card w/balance baslcally looks like 100% utilization as I understand it and that's about the same magnitude drop I got when I let one card report 99% something for reference so it's plausible if you're in a dirty bucket like I am. Get that reporting correctly as 0 and it wouldn't surprise me if you got the points back. Closing an account ain't a big thing, though I would've just paid them to zero except one and left them open when talking mortgage.

Re: Should I keep my Merrick cards open?

Anonymous — Tue, 15 Nov 2016 23:29:54 GMT

@Revelate wrote:
@Anonymous wrote:
....and my FICO 8 scores are down by an average of 6 points with only one of the two reporting closed. This was not such a swell idea afterall, apparently.
Closed card w/balance baslcally looks like 100% utilization as I understand it and that's about the same magnitude drop I got when I let one card report 99% something for reference so it's plausible if you're in a dirty bucket like I am. Get that reporting correctly as 0 and it wouldn't surprise me if you got the points back. Closing an account ain't a big thing, though I would've just paid them to zero except one and left them open when talking mortgage.

+1 I think Revelate has found the culprit. I've closed over a half a dozen cards and score was only negatively affected once when Comenity reported my HSN card closed with a $39 balance and no stated limit.

Re: Should I keep my Merrick cards open?

Anonymous — Tue, 15 Nov 2016 23:40:50 GMT

Hopefully so!! I'll see if I can get them both to report zero owed asap!