cancel
Showing results for 
Search instead for 
Did you mean: 

Why wait 1 or 2 years to close accounts?

tag
Anonymous
Not applicable

Why wait 1 or 2 years to close accounts?

Why do people recommend waiting for 1 or 2 years? The accounts will be the same age fico-wise wether they are opened or closed. Whats the theory behind this? Average age won't change open or closed.
Message Edited by hobojon on 01-29-2009 10:56 PM
Message 1 of 17
16 REPLIES 16
laz98
Senior Contributor

Re: Why wait 1 or 2 years to close accounts?

why would you want to have a few accounts on your report that were only open for a couple of months?  i think it makes you look unstable or irresponsible, like you impulsively applied for credit you didn't really need or want.  think of it like job-hopping.
Message 2 of 17
Anonymous
Not applicable

Re: Why wait 1 or 2 years to close accounts?

 

I am unstable and irresponsible and I don't have or need a job. None of these things matter to my fico score.

The question is why do people recommend not closing accounts until they are one or two years old if it doesn't affect your fico score?

Message Edited by hobojon on 01-30-2009 02:13 AM
Message 3 of 17
manyquestions
Established Contributor

Re: Why wait 1 or 2 years to close accounts?

I would guess they think it looks better on a manual review to not have a bunch of accounts with short histories.  Don't know if there is any truth to that.  Why would a loan officer care if you had accounts that were open for less than two years?  Maybe they just think their reports look prettier with 24 months of data showing for the account.
Message 4 of 17
Anonymous
Not applicable

Re: Why wait 1 or 2 years to close accounts?

Because if you open an account and close it right away it doesn't really affect your score. You have no history of actually using the card and paying. Even though my cards report $0 at the end of the month fico knows I use the cards and paid on them. This information is transmitted to them but you never see it reflected on your report just the $0 balance. When you go and try and get a mortgage they want at least 2 years of payment history a closed account doesn't give you that.
Message 5 of 17
Anonymous
Not applicable

Re: Why wait 1 or 2 years to close accounts?

One reason is that you'll take a net 'loss', creditwise. You take a hit or more for the INQ, you take a hit for seeking and obtaining new credit, you take a hit to AAoA, and then you have nothing to show for it (no positive payment history, to increased CL for utilization.... nothing). You'll have lost FICO points that it will take a year to fully recover, for absolutely nothing.

 

After one year, you'll have seen your return on both the INQ, and the "new credit". After two years, your AAoA will have recovered nicely, and you'll have two years of stellar payment history upon consideration for other credit-- which is what a lot of lenders look for. Remember, other lenders don't rely solely on your FICO score itself in determining if you're a good lending risk. They actually review your history with other lenders. Opening and closing accounts, without any tangible history, just won't give you that.

Message 6 of 17
Anonymous
Not applicable

Re: Why wait 1 or 2 years to close accounts?

OK, that makes since. I've already disputed all my inquiries off. I will dispute the closed accounts off that are reducing my average age. thanks.
Message 7 of 17
Anonymous
Not applicable

Re: Why wait 1 or 2 years to close accounts?

Were these accounts opened fraudulently? By someone other than yourself? If not, then you should not be disputing accurate information. The discussion of doing so is strictly prohibited in these forums, because it's unethical. Per the FCRA, you're only allowed to dispute inaccurate or outdated information, past CRTP.


@Anonymous wrote:
OK, that makes since. I've already disputed all my inquiries off. I will dispute the closed accounts off that are reducing my average age. thanks.

 

Message 8 of 17
Anonymous
Not applicable

Re: Why wait 1 or 2 years to close accounts?


@Anonymous wrote:

 

I am unstable and irresponsible and I don't have or need a job. None of these things matter to my fico score.

The question is why do people recommend not closing accounts until they are one or two years old if it doesn't affect your fico score?

Message Edited by hobojon on 01-30-2009 02:13 AM

I've never heard anybody specify "1 or 2 years"

If you want real answers to your questions, honey works better.

Message 9 of 17
Anonymous
Not applicable

Re: Why wait 1 or 2 years to close accounts?

The FCRA states you can dispute any inaccurate information. It does not specify that the only way it can be inaccurate is if it is "opened fraudulently or by someone other than yourself". The inquiries had the wrong date. They were all dated for the day after I actually applied. I disputed them, they could have fixed the date, they decided to delete them instead. I can find many other similar inaccuracies in the accounts if I try.

Message 10 of 17
Advertiser Disclosure: The offers that appear on this site are from third party advertisers from whom FICO receives compensation.