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Canceling Oldest Credit Card Misinformation

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tomcatant1
New Member

Canceling Oldest Credit Card Misinformation

So I did a lot of reading about canceling credit cards because I wanted to cancel my two oldest credit cards. They we're horrible cards low limits and high interest rates. (First Premier and Capitalone) All the advice I found said the exact same thing, "Don't cancel your oldest credit cards because it will lower your average age of accounts". Tiered of carrying bad cards that I could do nothing with, I cancelled them both. I have had them for about 8 years each so I was really worried about the impact that it would have on my credit score. I was shocked to find out that my credit score actually went up 20 points! How could this possible happen. Well I realized that the average age of account is not calculated based on your oldest credit card, it based on your oldest account period. It doesn't differentiate between revolving, installment, mortgage or even closed account. Because of this my oldest account was actually a student loan that was taken our my freshman year in college. It is still listed as my oldest account and thus my Aaoa wasn't drastically effected. So if you have student loans or any other account, their age actually helps your Aaoa. If you want to cancel your oldest credit card and you have older student loan or any other type of account do it. No use being stuck with a bad card if you don't have to be. 

 

 

If you were wondering my credit score are 

767 EX FICO (Pulled last week by AMEX)

785 EQ FICO 

770 TU FICO

 

Message 1 of 15
14 REPLIES 14
myjourney
Super Contributor

Re: Canceling Oldest Credit Card Misinformation

Welcome to the forum

 

Open or closed accounts doesn't matter both still count for a 10 year period

Before you app think...
Have you done your research of the CC?
Does it fit your spending?
Do you have a plan for the bonus w/o going into debt?
Can you afford the AF?
Do you know the cards benefits? Is it worth the HP?
Message 2 of 15
tomcatant1
New Member

Re: Canceling Oldest Credit Card Misinformation

Yeah I know they do. That's basically what I was trying to say when I referenced closed accounts. Thanks for the welcome. 

Message 3 of 15
KIPPIE12
Established Contributor

Re: Canceling Oldest Credit Card Misinformation

+1

Current Score: EQ: 828, EX: 833, TU: 820 Citi TY Premier WEMC 46.5, (Since 1983)Discover 15.6k|BOA WMC 30.5k|Barclays Juniper Rewards 15k|Barclays Amex 20k| Cap One QS WMC 15K|Chase Freedom VS 19.3k|Citi Dividend WEMC 25k|FNBO 15.5k|CSP 22.1K|Chase Marriott 31.3k|Citi TYP 20K|Citi DP 16.5k|Macys 5k|Sams MasterCard 15k|Barclay Arrival Plus WEMC 18.7k|Chase IHG WMC 26k|Citi Double Cash 10k|Chase MileagePlus Explorer 14k|Amex Everyday 16.2|BBVA Amex 22.5k|Total Rewards VS 12.5k|SGV 10K|Venture 12k|BOA Virgin Atlantic WEMC 11.2K|MB Amex 9.5k
Message 4 of 15
FocusedAndDetermined
Senior Contributor

Re: Canceling Oldest Credit Card Misinformation


@myjourney wrote:

Welcome to the forum

 

Open or closed accounts doesn't matter both still count for a 10 year period


...and sometimes longer.  I have one closed account still reporting that is well beyond a decade old.  I'm not complaining!

Message 5 of 15
Shogun
Moderator Emeritus

Re: Canceling Oldest Credit Card Misinformation

I have a car loan that was paid off in 1995 that is still reporting on mine.

Starting Score: 504
July 2013 score:
EQ FICO 819, TU08 778, EX "806 lender pull 07/26/2013
Goal Score: All Scores 760+, Newest goal 800+
Take the myFICO Fitness Challenge

Current scores after adding $81K in CLs and 2 new cars since July 2013
EQ:809 TU 777 EX 790 Now it's just garden time!

June 2017 update: All scores over 820, just pure gardening now.
Message 6 of 15
bs6054
Valued Contributor

Re: Canceling Oldest Credit Card Misinformation


@Shogun wrote:

I have a car loan that was paid off in 1995 that is still reporting on mine.


So a question I hadn't really thought about before.   I was looking in more detail at my three CRB report.    There is one old mortgage that is correctly marked as closed by 2 bureaus, but as open (with $0 balance) by the third.  All note it was sold or transferred, including the one marking it open.  And it does appear in the "current" area of the report rather than "current closed".   And all payment history ceases in 2008.

 

So I assume that the mortgage company isn't still reporting this as open to just one of the bureaus, but I am not sure how this is happening!  Did the bureau miss an "account closed' notification?

 

Message 7 of 15
Simply827
Established Contributor

Re: Canceling Oldest Credit Card Misinformation

Yes OP, but I think you may still be confused about how AAoA works. True it does count all types of accounts, but open and closed accounts are counted as well. Closing a card doesn't affect your AAoA, whether you have an older account or not.


Starting Score: 515
Current Score: EQ08 711 EX08 731 TU08 735
Goal Score: 740+

Amex BCP $25k | Discover IT $15.7k | Cap 1 QS $10k | PSECU $10k | Citi DC $9300 | Citi DP $6800 | Barclay Ring $6500 | PayPal Extras MC $5045 | DCU $5000 | Chase Slate $5000 | Barclays AA $4100 | Chase Freedom $4000 | Union Plus $1000 | Target $500
Message 8 of 15
indiolatino61
Valued Contributor

Re: Canceling Oldest Credit Card Misinformation


@tomcatant1 wrote:

So I did a lot of reading about canceling credit cards because I wanted to cancel my two oldest credit cards. They we're horrible cards low limits and high interest rates. (First Premier and Capitalone) All the advice I found said the exact same thing, "Don't cancel your oldest credit cards because it will lower your average age of accounts". Tiered of carrying bad cards that I could do nothing with, I cancelled them both. I have had them for about 8 years each so I was really worried about the impact that it would have on my credit score. I was shocked to find out that my credit score actually went up 20 points! How could this possible happen. Well I realized that the average age of account is not calculated based on your oldest credit card, it based on your oldest account period. It doesn't differentiate between revolving, installment, mortgage or even closed account. Because of this my oldest account was actually a student loan that was taken our my freshman year in college. It is still listed as my oldest account and thus my Aaoa wasn't drastically effected. So if you have student loans or any other account, their age actually helps your Aaoa. If you want to cancel your oldest credit card and you have older student loan or any other type of account do it. No use being stuck with a bad card if you don't have to be. 

 

 

If you were wondering my credit score are 

767 EX FICO (Pulled last week by AMEX)

785 EQ FICO 

770 TU FICO

 


Welcome to myFICO. 

 photo Logo - Credit Card Collection - Data Inclusive_zpskiw5xfjj.jpg photo emerald_zpsfitcxbh5.jpg
Message 9 of 15
improvingmycredit
Valued Contributor

Re: Canceling Oldest Credit Card Misinformation

+1 @Simply827
Welcome to the Forums!!! @tomcatant1!
Here is a good link about how closed accounts affect FICO. Closing an account in itself does not affect your AAoAs. The account still reports for 10 years. ( most of the time). AAoA factors in ALL accounts- closed or open still reporting. Because not all of the same accounts report on all CRAs, your AAoA can be different on all 3.
Hope this helps.

http://ficoforums.myfico.com/t5/Credit-Cards/Closing-Credit-Cards/td-p/347190

Starting Score: 642
Current Score: EQ 773, EX 780, TU 777 (All FICO)
Goal Score: 800+

Cards: NFCU Flagship 50K, DC 30K, BCP 28.6K, Arrival+ 25K, Citi DP 22.8K, CSR 20.5K, TotalRewards 25K, QuickSilver 20K

Message 10 of 15
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