cancel
Showing results for 
Search instead for 
Did you mean: 

Do Some Lenders Exclude Closed Accounts in Credit-Lending Decisions?

Highlighted
Valued Contributor

Do Some Lenders Exclude Closed Accounts in Credit-Lending Decisions?

Hey, guys.

 

I am a bit confused. 

 

The OP of another thread asked whether he or she could close his or her Capital One account because it has an AF but fears that because it is very old in credit age, closing it may tank his or her scores. 

 

It is my understanding that Fico considers closed accounts, but another poster on the thread said that some lenders do not even consider closed accounts. 

 

Is this really true? If so, which lenders do not consider closed accounts? Smiley Happy

 

 

Message 1 of 6
5 REPLIES 5
Highlighted
Regular Contributor

Re: Do Some Lenders Exclude Closed Accounts in Credit-Lending Decisions?

In my case, with 17 active cards, if one of my old closed ones ‘didnt count’ when a lenders underwriting is looking at it, I’d consider that a bonus!
Kind of have everything I want now, creditwise. Undeliberately gardening until I have some spending to do and find a 100,000 Amex Platinum offer lol

Started my credit journey August 2016, after abstaining from credit for years after some poor financial choices in high school. Started with scores in the 580s. Current scores 11/6/18 - EQ: 754 TU: 757 EX: 743

From oldest to newest: DuPage CU Visa Platinum, SL 500 now 3750, Cap1 Platinum SL 300 PC'd to QS now 1600, Alliant Credit Union Share Secured Loan $500, Amex BCE SL 5000 now 600, Neiman Marcus SL 700 now 10000, Target RedCard SL 400 now 2900, Amex ED SL 10000 now 500 (combined with Cash Magnet), Chase AARP SL 800 now 3300, Chase Amazon Prime SL 1000 now 10000, Honda Lease, Discover it SL 1000 now 7000, Synchrony PayPal 2% CB SL 3000 now 10000, Barclays Uber Visa SL 800 now 2100, Citi ThankYou Preferred SL 3300 now 5300, Chase Ritz-Carlton SL 10000 now 1500 (moved to other cards to get annual fee refund), Comenity Total Rewards Visa SL 2000 now 3250, US Bank Cash+ SL 500 recon'd to 10000, US Bank Reserve LOC 1000, Union Bank Rewards Visa SL 5000 now 5000, Amex Cash Magnet SL 9900 now 20000, Cap1 Venture SL 10000 now 10000, Discover it 3000 SL now 4000, Amex SPG Luxury 3100 SL now 3100, Amex Amazon Business Prime 10000 SL now 10000, Amex Gold NPSL, US Bank Premier LOC 5000, US Bank Visa Platinum 5400 SL currently reconning

Combined revolving CL $135,300

Goal: Spring 2019 800+ club, $50,000 combined Amex limit
Message 2 of 6
Highlighted
Moderator

Re: Do Some Lenders Exclude Closed Accounts in Credit-Lending Decisions?


@creditwarrior2317616 wrote:

Hey, guys.

 

I am a bit confused. 

 

The OP of another thread asked whether he or she could close his or her Capital One account because it has an AF but fears that because it is very old in credit age, closing it may tank his or her scores. 

 

It is my understanding that Fico considers closed accounts, but another poster on the thread said that some lenders do not even consider closed accounts. 

 

Is this really true? If so, which lenders do not consider closed accounts? Smiley Happy

 

 


You're conflating what lenders can/do look at with what the FICO formula uses; the two aren't always the same.

 

FICO will 'count' a close account as long as the credit bureau is still reporting it, which is usually up to 10 years for positive accounts.

 

Lenders are free to use FICO, their own in-house proprietary formula, some other formula, or any combination they please.  Their analysts (and algorithms) are free to 'count' things however they want, although most take one of the various FICO models into consideration.

Message 3 of 6
Highlighted
Valued Contributor

Re: Do Some Lenders Exclude Closed Accounts in Credit-Lending Decisions?


@UncleB wrote:

@creditwarrior2317616 wrote:

Hey, guys.

 

I am a bit confused. 

 

The OP of another thread asked whether he or she could close his or her Capital One account because it has an AF but fears that because it is very old in credit age, closing it may tank his or her scores. 

 

It is my understanding that Fico considers closed accounts, but another poster on the thread said that some lenders do not even consider closed accounts. 

 

Is this really true? If so, which lenders do not consider closed accounts? Smiley Happy

 

 


You're conflating what lenders can/do look at with what the FICO formula uses; the two aren't always the same.

 

FICO will 'count' a close account as long as the credit bureau is still reporting it, which is usually up to 10 years for positive accounts.

 

Lenders are free to use FICO, their own in-house proprietary formula, some other formula, or any combination they please.  Their analysts (and algorithms) are free to 'count' things however they want, although most take one of the various FICO models into consideration.


That makes total sense. Thanks, UnlceB! Smiley Wink

Message 4 of 6
Highlighted
Valued Contributor

Re: Do Some Lenders Exclude Closed Accounts in Credit-Lending Decisions?


@UncleB wrote:
You're conflating what lenders can/do look at with what the FICO formula uses; the two aren't always the same.

 

FICO will 'count' a close account as long as the credit bureau is still reporting it, which is usually up to 10 years for positive accounts.

 

 Lenders are free to use FICO, their own in-house proprietary formula, some other formula, or any combination they please.  Their analysts (and algorithms) are free to 'count' things however they want, although most take one of the various FICO models into consideration.


+1 :

And depending on  numbers in profile, it might help more if the lender does not consider closed accounts.

FNBO 2% Cashback Visa (20k) / Bank of the West Cashback MC (20k) / US-Bank Cash+ (15k)
FNBO Travel Elite (15k) / Citi Double Cash (20k) / US Alliance 3% (20k)
Ficos : 830 / AAoA : 9 yrs / AoOA : 24 Yrs / AoYA : 0
Message 5 of 6
Highlighted
Senior Contributor

Re: Do Some Lenders Exclude Closed Accounts in Credit-Lending Decisions?

To add to the excellent answer UncleB offered, many/most basic credit approvals are granted/denied by a computer system with very little if any manual review and many/most of those use FICO scoring for the score factor (one of several factors in the process). Fico scoring uses closed accounts (as long as they are still showing on your CRA's reports) so in general or most cases closed accounts do count when the computer decides you are going to be friends. 

Message 6 of 6
Advertiser Disclosure: The offers that appear on this site are from third party advertisers from whom FICO receives compensation.