topic Re: Close a Tradeline in Understanding FICO® Scoring

Close a Tradeline

ironchef — Tue, 03 Mar 2020 20:05:49 GMT

I am unfamilar with what will transpire with all my CB scores if I close a Card that I dont use which is a very low limit to start with . It gets no activity because there is no great reward and also there is no balance.

I woud like to close it unless it will affect my CB report or my Score then I will leave it. If decide to close whats the best method?

Re: Close a Tradeline

thornback — Tue, 03 Mar 2020 20:19:31 GMT

An account closed in good standing will remain on your reports for ~10 years, continuing to age & factor into your age of accounts. The only thing you'll lose is the credit limit. Score will be affected if the loss of the limit causes your aggregate util to increase over a utilization threshold.

If the account is significantly older than your others, then you may experience a score drop when it finally falls off your reports ~10 years down the line.

If you don't use it, close it. You can also let it sit at zero and allow the creditor to eventually close it for inactivity. The difference is an account notation of "closed at consumers request" or "closed by credit grantor".

Alternatively, you can keep it open forever (assuming no fees are involved) and keep it active by charging something small every 3-4 months and immediately paying it off.

Re: Close a Tradeline

Brian_Earl_Spilner — Tue, 03 Mar 2020 20:28:12 GMT

In addition, on VantageScore, it will no longer be calculated in you AAoA. Not a big deal, unless you plan to do business with Synchrony.

Re: Close a Tradeline

ironchef — Tue, 03 Mar 2020 20:30:58 GMT

Thank you for the detail infomation and reponse!. Most of which I was apprised of but was not certain of some other items. The limit will not affect my Utl and the age of card is 2-3 years old. I was uncertain of the amount of tradelines open on report to change which I thought can affect the score ?

Re: Close a Tradeline

ironchef — Tue, 03 Mar 2020 20:32:51 GMT

I hardly look at vantage score or us it. I didnt plan on it the only upcoming big thing with credit is in June for a pull on credit for my new house to be built .

Re: Close a Tradeline

thornback — Tue, 03 Mar 2020 20:35:32 GMT

@ironchef wrote:
Thank you for the detail infomation and reponse!. Most of which I was apprised of but was not certain of some other items. The limit will not affect my Utl and the age of card is 2-3 years old. I was uncertain of the amount of tradelines open on report to change which I thought can affect the score ?

Number of open tradelines affects numbers of cards with balances, which can impact your score. That's why the recommended is 3 or more, so you can always manage 1/3 or less reporting a balance if you need to optimize scores (like azeo). If you'll still have 3+ remaining, no worries.

Re: Close a Tradeline

Brian_Earl_Spilner — Tue, 03 Mar 2020 20:42:06 GMT

@thornback wrote:
@ironchef wrote:
Thank you for the detail infomation and reponse!. Most of which I was apprised of but was not certain of some other items. The limit will not affect my Utl and the age of card is 2-3 years old. I was uncertain of the amount of tradelines open on report to change which I thought can affect the score ?
Number of open tradelines affects numbers of cards with balances, which can impact your score. That's why the recommended is 3 or more, so you can always manage 1/3 or less reporting a balance if you need to optimize scores (like azeo). If you'll still have 3+ remaining, no worries.

EQ requires 4, I believe. There's also speculation that there's a 20% use threshold which would require 5 cards. I haven't looked into it, but I believe @Anonymous was talking about it.

Re: Close a Tradeline

ironchef — Tue, 03 Mar 2020 20:41:30 GMT

yes well over 3.. okay thanks again

Re: Close a Tradeline

ironchef — Tue, 03 Mar 2020 20:44:11 GMT

my Utl is 4% and thats with 8 cards which after the one i close it will remain the same . i only carry a balnace on 3 cards all which are very low balance the others aways zero

Re: Close a Tradeline

thornback — Tue, 03 Mar 2020 20:44:34 GMT

@Brian_Earl_Spilner wrote:
@thornback wrote:
@ironchef wrote:
Thank you for the detail infomation and reponse!. Most of which I was apprised of but was not certain of some other items. The limit will not affect my Utl and the age of card is 2-3 years old. I was uncertain of the amount of tradelines open on report to change which I thought can affect the score ?
Number of open tradelines affects numbers of cards with balances, which can impact your score. That's why the recommended is 3 or more, so you can always manage 1/3 or less reporting a balance if you need to optimize scores (like azeo). If you'll still have 3+ remaining, no worries.
EQ requires 4, I believe. There's also speculation that there's a 20% use threshold which would require 5 cards. I haven't looked into it, but I believe @Anonymous was talking about it.

Really? EQ requires 4? I did not know that.

I am aware of the 20% threshold - it affects my profile, good for 3-5 points.

Re: Close a Tradeline

thornback — Tue, 03 Mar 2020 20:47:12 GMT

@ironchef wrote:
my Utl is 4% and thats with 8 cards which after the one i close it will remain the same . i only carry a balnace on 3 cards all which are very low balance the others aways zero

FYI, Brian was referring to % of cards with balances, not util.

Re: Close a Tradeline

Brian_Earl_Spilner — Tue, 03 Mar 2020 20:47:43 GMT

@thornback wrote:
@Brian_Earl_Spilner wrote:
@thornback wrote:
@ironchef wrote:
Thank you for the detail infomation and reponse!. Most of which I was apprised of but was not certain of some other items. The limit will not affect my Utl and the age of card is 2-3 years old. I was uncertain of the amount of tradelines open on report to change which I thought can affect the score ?
Number of open tradelines affects numbers of cards with balances, which can impact your score. That's why the recommended is 3 or more, so you can always manage 1/3 or less reporting a balance if you need to optimize scores (like azeo). If you'll still have 3+ remaining, no worries.
EQ requires 4, I believe. There's also speculation that there's a 20% use threshold which would require 5 cards. I haven't looked into it, but I believe @Anonymous was talking about it.
Really? EQ requires 4? I did not know that.

I am aware of the 20% threshold - it affects my profile, good for 3-5 points.

Yeah, apparently @Anonymous tested it and they have a threshold at 25%. May have been someone else, don't remember.

Re: Close a Tradeline

Anonymous — Tue, 03 Mar 2020 21:35:44 GMT

@Brian_Earl_Spilner Can you give me any further information on that 25%threshold and where I can find out dps on that by chance?

@thornback thank you for confirming that 20% threshold.

@AllZero

Re: Close a Tradeline

Brian_Earl_Spilner — Tue, 03 Mar 2020 21:38:33 GMT

@Anonymous wrote:
@Brian_Earl_SpilnerCan you give me any further information on that 25%threshold and where I can find out dps on that by chance?

@thornbackthank you for confirming that 20% threshold.

@AllZero

Oh, shoot. Let me see if I can find it. I'm almost 100% sure it was by bbs, but it could have been @SouthJamaica

Re: Close a Tradeline

Anonymous — Tue, 03 Mar 2020 21:39:45 GMT

Because we know there’s one at 20 we’re trying to determine if the next one is at 25 or 33%.

Thanks!!

Re: Close a Tradeline

SouthJamaica — Tue, 03 Mar 2020 21:51:48 GMT

@Brian_Earl_Spilner wrote:
@Anonymous wrote:
@Brian_Earl_SpilnerCan you give me any further information on that 25%threshold and where I can find out dps on that by chance?

@thornbackthank you for confirming that 20% threshold.

@AllZero
Oh, shoot. Let me see if I can find it. I'm almost 100% sure it was by bbs, but it could have been @SouthJamaica

I think I had once done some posts speculating that when I crossed the line of 30% of my revolving accounts posting a balance, there was a change in EX FICO 2, and wondering if there was also something like that at 20%. Don't recall if I ever found out.

Re: Close a Tradeline

pinkandgrey — Tue, 03 Mar 2020 22:00:54 GMT

Since the limit is small, then I assume utilization won't be much affected.

If it's in good standing, then the account will report for many years to come. (And by then the "loss" won't matter.)

Many people would advocate keeping it open and putting a small charge on it occasionally just to show use. If you want to do that, that's an option.

For me personally, I would never keep a card open if I didn't use it--even if it DID have a huge limit. I favor simplicity and peace of mind (I'm a control freak.) over the slight scoring benefits.

Overall, you would be completely fine closing it. Your score wouldn't take much of a hit at all. Totally up to you, of course!

If you do close, just call the issuer and make sure that it will report as "Closed by Consumer."
Good luck!

Re: Close a Tradeline

Anonymous — Wed, 04 Mar 2020 02:58:50 GMT

I'd get rid of it. Low limit which won't hurt utilization, and its a card that won't grow.

Going forward, you want to keep your good cards open for a long time to build a strong AAoA with several cards.

Re: Close a Tradeline

ironchef — Wed, 04 Mar 2020 19:12:47 GMT

lol As I am and Thank you for your infomation !

Re: Close a Tradeline

ironchef — Wed, 04 Mar 2020 19:15:14 GMT

Agreed about cards AAoY and I am about 99% to close card .. Wasnt sure to replace card with another tradeline. I have my pick but unsure if thats even a option ?