ooooooo Lexie
@09Lexie wrote:Dead link.
Remove comma from end of link and it works, but the link on said page to the fico.com page that they are reffering to as source doesn't work, so not sure on this subject, as I wasn't able to google any more data specific to this topic, from a fico or CB source.
This I think is the link I think they wanted to link us too, but even in that they don't mention closed accounts. Only thing they mentioned is adjustments to how AU are calculated in score in effort to reduce the impact of piggybacking to manipulate scores.
FICO 08 does score open and closed accounts differently than its predecessor. It appears that a small number of TLs -either open or closed will be viewed negatively. Theoretically, a person with a thicker file can afford to close a higher number of TLs .
Number of accounts
Ethan Dornhelm of FICO said that under FICO 8, having "a relatively large number of open accounts in good standing will be viewed more favorably than having only a few accounts in good standing." Having only a small number of accounts that are both open and active will now have a more negative effect on your score.
Accounts that are open but inactive
FICO 8 is more aware of which accounts have been inactive with a 0 balance for a long time, and those accounts will factor less into your score.
@Anonymous wrote:
@09Lexie wrote:FICO 08 does score open and closed accounts differently than its predecessor. It appears that a small number of TLs -either open or closed will be viewed negatively. Theoretically, a person with a thicker file can afford to close a higher number of TLs .
Number of accounts
Ethan Dornhelm of FICO said that under FICO 8, having "a relatively large number of open accounts in good standing will be viewed more favorably than having only a few accounts in good standing." Having only a small number of accounts that are both open and active will now have a more negative effect on your score.
Accounts that are open but inactive
FICO 8 is more aware of which accounts have been inactive with a 0 balance for a long time, and those accounts will factor less into your score.
So taken together I think that means the Closing Credit Card link (and my usual advice) isn't right any more, at least for 08 scorers. It seems to be that:
For score maximization: do not close credit cards yourself and put small charges on each regularly (no longer just to prevent an issuer closing them, but for score purposes as well).
It depends on the the file. Yes, for thin files it would seem to reason would need a larger proportion of open files than closed.
@Anonymous wrote:
@09Lexie wrote:FICO 08 does score open and closed accounts differently than its predecessor. It appears that a small number of TLs -either open or closed will be viewed negatively. Theoretically, a person with a thicker file can afford to close a higher number of TLs .
Number of accounts
Ethan Dornhelm of FICO said that under FICO 8, having "a relatively large number of open accounts in good standing will be viewed more favorably than having only a few accounts in good standing." Having only a small number of accounts that are both open and active will now have a more negative effect on your score.
Accounts that are open but inactive
FICO 8 is more aware of which accounts have been inactive with a 0 balance for a long time, and those accounts will factor less into your score.
So taken together I think that means the Closing Credit Card link (and my usual advice) isn't right any more, at least for 08 scorers. It seems to be that:
For score maximization: do not close credit cards yourself and put small charges on each regularly (no longer just to prevent an issuer closing them, but for score purposes as well).
Do you need to let multiple accounts report a small balance? Or can you still get away with letting only 1 card report a balance?
