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So I've gone the @pinkandgrey route and closed several of my cards this morning:
1) Barclaycard Apple Rewards, CL $5,500, opened Jan '13
2) Cap1 QS (was an AU on my wife's, which is nearly maxed but being paid down slowly), CL $15,150, opened July '05
3) Sears store card, CL $5,000, opened September '14
4) Sunoco, CL $975 (ooooh!), opened Nov '97 (my oldest card!)
Total closed CLs: $26,625, leaving me with a new total of $105,650.
New AAoA: 6.19.
Utilization falls from just under 16% to 6.72% as of today.
And now I have a few questions:
1) how long will it take these closures to appear on my report as such?
2) if I understand it correctly, the closed AU should no longer be included in my AAoA. Is that correct?
3) I've also read that Cap1 doesn't necessarily report closed AU accounts as closed to the CRAs. Is that correct, and will I need to file a dispute with each bureau to have it removed?
@Anonymous wrote:
Question: I understand wanting wallet simplicity but why close your OLDEST card, especially when it was so old?
What's done is done. I'm just curious.
Fair question! Three reasons come to mind:
1) I wanted to close accounts I no longer intend to use to reduce the possibility of fraud
2) I don't intend to use cards that don't pay me back for using them
3) it's my impression that accounts remain on the credit report and are included in AAoA for 10 years after closure, and by then I won't need to worry as my newest accounts will have aged sufficiently to contribute positively in that regard
Closing cards won't affect your AAoA (average age of accounts), AoOA (age of oldest account), or AoYA (age of youngest account) until a card drops off your report. Credit Karma shows your "average age of open accounts." That's misleading because both FICO and VantageScore include both open and closed accounts when computing age stats.
The closures may appear on your report quickly. It's difficult to tell what might happen with the AU and AAoA. It seems like it's mostly a wait and find out scenario. My best guess is that if the card counted toward AAoA when it was open, it'll likely count as long as it stays on your report. Someone else is better qualified to address what to expect with the AU and how it appears on your credit report.
@HeavenOhio wrote:Closing cards won't affect your AAoA (average age of accounts), AoOA (age of oldest account), or AoYA (age of youngest account) until a card drops off your report. Credit Karma shows your "average age of open accounts." That's misleading because both FICO and VantageScore include both open and closed accounts when computing age stats.
That's exactly what I thought... thanks for confirming!
@Anonymous wrote:
Good riddance, right?! I'm down to 4 cards and still contemplating closing another 1-2. You just feel lighter and there is less weight on your shoulders! Less chance of over spending or identity fraud etc etc
I'm all the way down to 16 now!
I want to reduce it even further, but there are a few I have to keep open due to balance transfers, utilization padding, etc. I could close 2-3 of those, but they'd have a negative impact on my wife's score, so they'll unfortunately have to remain open until we've paid down some of her other cards.
Not what I would have done but if it makes you happy and you are willing to take the hits then perhaps the piece of mind is justified. You should remember that "Available Credit" is a part of your score so as soon as the closure reports the points will go down. The catch is by how much and that is where things get fun as you already have a lot of available credit so it might not effect you as much as say someone that only had a few 5k trade lines. I hope that the Sunoco had a second card applied for close after as that way your Oldest card will not slide too much.