Cancelling subprime/getting FNBO

[Anonymous]

Hello all! I got a mailer from FNBO the other day. They seem well thought of on these boards & I'm wondering if now that my scores are up, if it's a good time to app? If they give me a decent enough sl to even out my utilization, I would look to close my subprime cards with higher interest & annual fees (Credit One, Cerulean TBOM, and Merrick). 

But at what point do you know you're ready to get rid of the rebuilders? My AAoA is 4.3 years, oldest account is 18. I don't want to shoot myself in the foot by lowering my AAoA any further, but maybe it's an okay trade to get those subprimes off & work towards better cards?

Thanks!

[FinStar]

Closing your accounts in it of itself doesn't impact your AAoA (based on FICO metrics).  A closed account can still be factored for up to ~10 years.  The impacts, if any, would be more along utilization if you're carrying any balances on your cards given the loss of the available credit on the closed accounts.

[Anonymous]

Looking at your credit cards listed above, I see no reason that you'd need any rebuilder cards/starter/predatory lender cards at all at this point.  You've got several major bank cards from Capital One, Amex, Discover and so on.  Keep those, drop the old dead weight and move forward.  As the previous reply stated, closing accounts has no impact on age of accounts factors.

As far as whether or not you should app, that really depends on the overall strength of your profile currently.  It looks like you've got mostly lower limit cards, which may suggest that your profile isn't all that strong.  You didn't mention what your utilization currently is.  How does it look?  I never suggest apping for cards unless utilization is in an ideal place (outside of a BT offer or other circumstance).  My conservative opinion on that is if you've got the funds to pay off your utilization, do it to strengthen your profile first.  If you don't have the funds, the conservative approach should say that taking on additional CCs wouldn't be a very wise financial move.

[AverageJoesCredit]

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@FinStar wrote:

Closing your accounts in it of itself doesn't impact your AAoA (based on FICO metrics).  A closed account can still be factored for up to ~10 years.  The impacts, if any, would be more along utilization if you're carrying any balances on your cards given the loss of the available credit on the closed accounts.

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Shhh Finny please dont wake the 🦅

OP, if it can help you in your everyday life and you get approved, getting that first Prime card will be a great first step in  breaking the subprime mold

[MisterWives]

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@Anonymous wrote:

Hello all! I got a mailer from FNBO the other day. They seem well thought of on these boards & I'm wondering if now that my scores are up, if it's a good time to app? If they give me a decent enough sl to even out my utilization, I would look to close my subprime cards with higher interest & annual fees (Credit One, Cerulean TBOM, and Merrick). 

But at what point do you know you're ready to get rid of the rebuilders? My AAoA is 4.3 years, oldest account is 18. I don't want to shoot myself in the foot by lowering my AAoA any further, but maybe it's an okay trade to get those subprimes off & work towards better cards?

Thanks!

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If they are subprime cards that don't cost you anything to keep then maybe keep them until you are definitely in the tier above, but since some of them have annual fees I would drop them so fast without a thought.

You're getting the more brand name credit cards that you should be fine to drop any subprime card imo if they aren't doing anything for you. Better to focus on the ones that will grow

[Anonymous]

Thanks for your replies! The cards I'm thinking of cancelling all carry a zero balance. I have been putting almost all my monthly spend on the AmEx and Discover. My overall uti is 4%. Maybe I don't understand AAoA, but wouldn't I take a hit simply by opening a new account?

In terms of profile, the bad is some old student loans that are nearing their home stretch to drop off and two 30 day lates on Capital One from 2016. Inquiries are 2-4, depending on CRA. The good news is, I've gotten CLIs on all my cards (except that darn AmEx) in the last month-ish, so I'm slowly building! 

[FinStar]

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@Anonymous wrote:

Thanks for your replies! The cards I'm thinking of cancelling all carry a zero balance. I have been putting almost all my monthly spend on the AmEx and Discover. My overall uti is 4%. Maybe I don't understand AAoA, but wouldn't I take a hit simply by opening a new account?

In terms of profile, the bad is some old student loans that are nearing their home stretch to drop off and two 30 day lates on Capital One from 2016. Inquiries are 2-4, depending on CRA. The good news is, I've gotten CLIs on all my cards (except that darn AmEx) in the last month-ish, so I'm slowly building! 

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Opening a new account impacts both your AAoA and AoYA factors since you are introducing a new tradeline to the rest of your profile.  A closed account already coexists with the rest of your profile, so it continues to age along with the rest of your tradelines.  

[Anonymous]

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@Anonymous wrote:

Thanks for your replies! The cards I'm thinking of cancelling all carry a zero balance. I have been putting almost all my monthly spend on the AmEx and Discover. My overall uti is 4%. Maybe I don't understand AAoA, but wouldn't I take a hit simply by opening a new account?

In terms of profile, the bad is some old student loans that are nearing their home stretch to drop off and two 30 day lates on Capital One from 2016. Inquiries are 2-4, depending on CRA. The good news is, I've gotten CLIs on all my cards (except that darn AmEx) in the last month-ish, so I'm slowly building! 

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Have you attempted to GW remove those 30 day lates?  If you check out the rebuilding forum you'll see multiple members have reported success with Capital One GW adjustments in the recent weeks.

AAoA will drop with the addition of a new account.  Figuring the impact is quite simple.  Let's say you have 10 accounts on your CR currently and your AAoA is 4 years, 8 months.  That would be 56 months of average history x 10 accounts, or 560 months.  If you then add an 11th account, you take the same 560 months and divide it by 11.  This drops your AAoA to 50.9 months, divided by 12 giving you 4 years, 3 months. 

Using the numbers above, let's say hypothetically there's an AAoA threshold at 4 years, 6 months.  Your AAoA dropping from 4 years 8 months to 4 years 3 months would cross that threshold from the opening of the new account.  Say this resulted in a loss of 7 points.  In 3 months time once your AAoA reached the 4 year 6 month threshold again, you'd regain those 7 points on the 1st of that month. 

You can change the numbers I gave above for discussion purposes to your own and see what the AAoA impact would be from opening 1 new account, 2 new accounts, etc.

[Anonymous]

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@Anonymous wrote:

Hello all! I got a mailer from FNBO the other day. They seem well thought of on these boards & I'm wondering if now that my scores are up, if it's a good time to app? If they give me a decent enough sl to even out my utilization, I would look to close my subprime cards with higher interest & annual fees (Credit One, Cerulean TBOM, and Merrick). 

But at what point do you know you're ready to get rid of the rebuilders? My AAoA is 4.3 years, oldest account is 18. I don't want to shoot myself in the foot by lowering my AAoA any further, but maybe it's an okay trade to get those subprimes off & work towards better cards?

Thanks!

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In your case, it's a necessary evil to apply for better cards.  You should be thinking long term.  You're already being approved for major creditors with nice rewards. The subprime/fee cards served their purpose but don't have a place in your long term plans IMO.

[Anonymous]

Appreciate all your help. This community has been the best! 

I went ahead and hit submit...with one hand covering my eyes 😜 I got an instant approval of $3900. Not as much as some people, but my highest actual card so far (not even counting Care Credit). I'm happy and hoping for a CLI in a few months. In the meantime, I'll look at which is the best card to cancel first!