topic Re: Closing a credit card down in Understanding FICO® Scoring

Closing a credit card down

Anonymous — Thu, 17 Jan 2019 03:02:46 GMT

Hi here I will be putting some data points of how my credit report (Experian) will look on February.

I started building credit back in 2016, but at that time I only had 1 credit card.

At the begining of last year I went crazy trying to open credit cards to add on time payments on my report, but I didn't realize that I was shorting my average of credit by doing so.

I want to close down a couple credit cards including: Kay store, capital one that has not been unsecured yet, Amex cash magnet, and fifth third.

Can doing that lower my credit score dramatically?

Experian Fico Score 08: 738

Utilization: 1% ( 100 dollars being used out of around 15000 of available credit)

Inquiries: 6 inquiries in the las year and one should be removed today.

Acoounts:

- Wells Fargo secured credit card (becoming unsecured next month): $300.00 opened on May, 2016 (2years and 8 months old)

-Chase (Auto loan): Opened on Jun, 2016 (2 years and 7 months old)

-Discover (Graduated from secured to unsecured last month on 7th statement): $1500 opened on May, 2018 (9 months old)

-Capital One (Secured credit card): $500 opened on May, 2018 (9 months old)

-Amex Cash Magnet: $1000 opened o Jun, 2018 (8 months old)

-Kay Comenity Store card: $1500 opened on July, 2018 (7 months old)

-Barclay Arrival Plus: $1500 opened on July, 2018 (7 months old)

-Fifth Third Trio: $4000 opened on August, 2018 (6 months old)

-Sam's Club Mastercard: $4800 opened on November, 2018 (3 months old)

-Amex Platinum Card: No pre-set spending limit opened on Dicember, 2018 (2 months old)

-Amex Hilton Honors Aspire: $3100 opened on January, 2018 (2 months old)

Please advise thanks,

Re: Closing a credit card down

Anonymous — Thu, 17 Jan 2019 03:17:41 GMT

As long as they aren't your oldest and don't impact your UTI - you are good! Best wishes!

Re: Closing a credit card down

Anonymous — Thu, 17 Jan 2019 03:29:38 GMT

Thanks for replying they are not my oldest account can it still lower my average of credit by closing them?

also how much could that drop it? I know it is unknown but an estimate

Re: Closing a credit card down

Anonymous — Thu, 17 Jan 2019 03:49:21 GMT

It will not drop you AAOA. Accounts in good standing will continue to report for 10 years.

Re: Closing a credit card down

Pikaboo-icu — Thu, 17 Jan 2019 04:19:15 GMT

@Anonymous wrote:
Thanks for replying they are not my oldest account can it still lower my average of credit by closing them?
also how much could that drop it? I know it is unknown but an estimate

You have several ages to pay attention to:

AooA: Age of oldest account

AAoA: Average age of account

AoYA: Age of youngest account

These won't change due to closing cards as Brandon posted, they will continue to report for 10 yrs.

The main thing is to watch your utilization. If you're carrying balances and you reduce available credit by closing cards, you can take a score hit for that.

cheersgif.gif

Re: Closing a credit card down

Anonymous — Thu, 17 Jan 2019 04:22:09 GMT

Thanks so much for replying if I close my oldest credit card could that make my score go down? why if it will be reporting for 10 years?

Re: Closing a credit card down

Pikaboo-icu — Thu, 17 Jan 2019 04:36:39 GMT

@Anonymous wrote:
Thanks so much for replying if I close my oldest credit card could that make my score go down? why if it will be reporting for 10 years?

No worries.. AAAthumbs_up_smiley.gif

It wont affect your score.

Yes, it will continue to report for 10 years so unless it's your oldest by far (years), it's ok to close.

BUT

It's also ok to just sock drawer the card if you're not paying an annual fee on it. Put lunch on it once every six months LOL

Re: Closing a credit card down

Anonymous — Thu, 17 Jan 2019 04:54:30 GMT

I honestly thought about that it is just that I have too many now that I am scared to forget I have to pay it and I am the type of person who checks his credit cards everyday also I am trying to get the platinum bonus and even though I never carry balances I feel preassured because is a charge card so I am scared that paying so much attention to the platinum I end up forgetting about another credit card lol I know it sounds crazy and funny

Re: Closing a credit card down

Pikaboo-icu — Thu, 17 Jan 2019 05:02:27 GMT

@Anonymous wrote:
I honestly thought about that it is just that I have too many now that I am scared to forget I have to pay it and I am the type of person who checks his credit cards everyday also I am trying to get the platinum bonus and even though I never carry balances I feel preassured because is a charge card so I am scared that paying so much attention to the platinum I end up forgetting about another credit card lol I know it sounds crazy and funny

I get it LOL

I'm OCD about paying my CC bills too. I get nervous if the statement date gets close and I haven't paid it off.

But if your oldest card, doesn't have any fees, you can hide it in a drawer (thus sock drawer) and just not use it.

That way it can report as zero bal each month.

But again, totally up to you and closing some to simplify is also a grand idea..

You should be safe either way so whatever is easiest on you.

AAgesturing-tip hat.gif

Re: Closing a credit card down

AverageJoesCredit — Thu, 17 Jan 2019 12:26:08 GMT

Suprised you want to close 5/3 thats a nice prime card. Amex too, can grow big time and help your utilization.

Re: Closing a credit card down

SouthJamaica — Wed, 06 Feb 2019 13:41:56 GMT

Just to remind folks that there's no guarantee a closed account will continue reporting for 10 years.

I had 5 closed accounts which stopped reporting on Equifax within a year of closure.

Re: Closing a credit card down

Anonymous — Wed, 06 Feb 2019 15:21:14 GMT

Great point by SouthJ. What happened to SouthJ is possible, though very rare. It happened to SouthJ during a time when Equifax was having a lot of crazy stuff happening with their database.

A closed account can also be deleted prematurely (i.e. before the ten year after closing mark) if a person is arguing with the creditor over something on it. The creditor might get tired of discussing whatever it is the person wants corrected and simply delete it. That happened to contributor Thomas Thumb.

In general, however, it is solid 98% (-ish) assumption that any account you close will remain on your reports until 120 months after it was closed, give or take a month. And part of that 2% exception is that the account could stay on the reports longer.

Re: Closing a credit card down

Anonymous — Wed, 06 Feb 2019 15:29:14 GMT

As the other folks have suggested, there are always reasons to close and other reasons to keep open. When a given card falls into both camps, you have to balance the two reasons and decide which is stronger.

Reasons to close:

* Dislike the card, would never use it unless you had to, etc.

* Tracking it to prevent fraud is more tiring than it is worth

* Card has an annual or (worse) monthly fee. If you have to buy something that you don't absolutely need once a year to keep it open (common with a store card) consider that an annual fee. Always consider PC-ing a card with an annual fee to a no-AF card before closing.

* Card does not have an Amex, Visa, MC, or Discover logo on it. (Insurance industry penalizes the presence of store cards and gives a heavier penalty still for "auto" accounts, e.g. a Pep Boys or Auto Zone or Firestore card.)

Reasons to keep open:

* Closing the card would bring your total number of open cards to four or less.

* It is quite a bit older than most of your other cards. Example: You have seven cards of ages 1, 1, 2, 2, 3, 8, and 9 years. You are considering closing the 8-year old card. Tend to keep it open since it is much older than most of your other cards.

* It has a big credit limit and losing that limit would make you have to do more work to keep your total utilization low. Remember, however, that big limits do not (in themselves) help your score -- a person can have an 850 score with three cards each of which has a $500 limit.

* You have not yet paid the card's balance to $0.

If a card does not fall into either camp, tend to keep it open, unless you have a ton of cards already. Then do whatever feels best.

Re: Closing a credit card down

Anonymous — Wed, 06 Feb 2019 15:30:19 GMT

Do you guys think it will hurt if I close my oldest account? it is 2 tears and 9 months old besides that all my accounts are new being the oldest one 10 months and the newest one 2 months ( 7 in total plus my oldest account)

I want to close it because my oldest account is a wellsfargo credit card that was secured for almost 3 years until two days ago that graduated, but I think it is ridiculous because they kept the 300 dollards deposit as my new credit line (No Credit line increase at all) being my credit sco fico 09 Experian at 770.

Other thing I wanted was product changing to the amex-Wellsfargo propel but I read here that they will likely close the old account and open a new one.

Could you guys advise please?

Re: Closing a credit card down

Anonymous — Wed, 06 Feb 2019 16:14:00 GMT

My comments below in blue.

@Anonymous wrote:
Do you guys think it will hurt if I close my oldest account? it is 2 tears and 9 months old besides that all my accounts are new being the oldest one 10 months and the newest one 2 months ( 7 in total plus my oldest account)

Closing it should not hurt your score in the short or medium term (e.g. as long as the closed account remains on your report, which will likely be for the next ten years). When it does fall off (ten years from now) your Age of Oldest Account will drop a tiny bit, which might ding your score slightly.

I want to close it because my oldest account is a wellsfargo credit card that was secured for almost 3 years until two days ago that graduated, but I think it is ridiculous because they kept the 300 dollards deposit as my new credit line (No Credit line increase at all) being my credit sco fico 09 Experian at 770.

The word ridiculous may mean that you are a bit angry with the CC issuer, and that closing the card might be a way of getting back at them. That comes up quite a bit here on the forums and it is a natural feeling. But in my opinion it is not a good reason to close a card. The $300 limit is not hurting you at all, only helping (if a tiny bit). A possible strategy is to keep the card open but only use it to buy a gallon of milk or a tank of gas every 4-5 months. You may find that WF will give you a credit limit increase in a year, quite possibly with only a soft pull. See this resource for more details:

https://www.doctorofcredit.com/credit-cards/which-credit-card-companies-do-a-hard-pull-for-a-credit-limit-increase/#Wells_Fargo

Closing one's oldest card (when it has no annual fee and is not a store card) should be done only after great consideration. Your default choice should be to keep it open.

Other thing I wanted was product changing to the amex-Wellsfargo propel but I read here that they will likely close the old account and open a new one.

You are right about WF's policies regarding product changes.

Could you guys advise please?

Re: Closing a credit card down

SouthJamaica — Wed, 06 Feb 2019 17:08:34 GMT

@Anonymous wrote:
Do you guys think it will hurt if I close my oldest account? it is 2 tears and 9 months old besides that all my accounts are new being the oldest one 10 months and the newest one 2 months ( 7 in total plus my oldest account)
I want to close it because my oldest account is a wellsfargo credit card that was secured for almost 3 years until two days ago that graduated, but I think it is ridiculous because they kept the 300 dollards deposit as my new credit line (No Credit line increase at all) being my credit sco fico 09 Experian at 770.
Other thing I wanted was product changing to the amex-Wellsfargo propel but I read here that they will likely close the old account and open a new one.
Could you guys advise please?

Yes I do think it hurts to close your oldest card. When it drops off both your "Age of oldest account" factor, and your "Average age of accounts" factor, will get reset. I would just leave it, use it once in a while for a small purchase, and probably some day WF will increase the credit limit or let you product change it (without losing the continuity). As long as it has no annual fee, I would let it be.