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Are these old closed accounts hurting me more than they’re helping? Dispute them to get deleted?

Member

Are these old closed accounts hurting me more than they’re helping? Dispute them to get deleted?

Looking at my current reports via CreditKarma I have one account in Transunion and 2 (one of them the one in TU) accounts in Equifax. They are student loans that I have successfully rehabilitated and they are showing in a separate credit line that is in good standing.

 

In Transunion, the one account that shows up says “Debt being pd through insurance” and in Equifax one says “Closed - Paid” and the other “Closed - Paid and Closed”.

I was under the impression that these accounts were helping my credit score by:

1. Increasing my total number of accounts.
2. Not showing any negative payment information

 

I was comparing a credit report I got from myFico.com in 2014 and these accounts were flagged as a “Negative indicator”. I don’t pay for myFico at the moment so I’m not sure if they’re still being flagged as negative, though I assume they are.

 

These accounts are old enough that I should be able to dispute them and get them removed. The first time they were both 120 days late was in 1/2008. Though, like I said they have been rehabilitated and show up in a single credit line that is in good standing.

 

However, I have 11 accounts total (closed and open). If I remove them, it’ll bring me down to the “Poor” grade for total # of accounts. So should I close them and open a couple credit cards (that I’ll never use or ever pay interest on)?

 

Things to consider are that I plan on applying for a mortgage loan no earlier than 03/2017. If I open new accounts it’ll bring my “Age of Credit History” down. Though, the last credit line I opened was in 11/2015, so I don’t think the average will go down too much if I open them soon. What do you all think I should do?

 

Thank you for your time!

Message 1 of 11
10 REPLIES 10
Contributor

Re: Are these old closed accounts hurting me more than they’re helping? Dispute them to get deleted?

I recently disputed an old student loan account that was shown as paid and closed but had a negative payment history. I believe the negative impact of missed payments etc. outweighs the positive impace of AAoA and an additional trade line. It makes a difference what the rest of your report is like as well. My thoughts are that I wuld rather have a clean, thin file over a thick dirty one.

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Message 2 of 11
Established Contributor

Re: Are these old closed accounts hurting me more than they’re helping? Dispute them to get deleted?

I think you should get a current copy of your reports with scores ($1 for all three reports with FICO scores if you sign up for a 7 day trial from creditchecktotal.com) to see if they are currently showing as negative before you do anything. It would also be helpful to know your current average age of accounts and which account is your oldest account. That will help others guess about how much it will help or hurt your scores if you take any of the actions you mentioned.

 

Message 3 of 11
Member

Re: Are these old closed accounts hurting me more than they’re helping? Dispute them to get deleted?

Thank you both for your help. The oldest account on my report is 9 years 4 months old. The newest is from November 2015 (sorry I edited it from 11/2016). The oldest account is actually the credit line for these two I'm asking about. After the rehabilitaion, all missed payment info was removed but the age of it was retained. 

 

The ones that show "Paid and closed" show Sallie Mae as the lender, the clean one shows AES as the lender. The rest of my credit report is clean. 8 credit cards and 1 gym membership that all have 100% payment history. Equifax shows 0 inquiries, Transunion shows two, the newest one is scheduled to be removed December 2017.

 

Thanks again.

Message 4 of 11
Established Contributor

Re: Are these old closed accounts hurting me more than they’re helping? Dispute them to get deleted?


@fedor wrote:

The oldest account on my report is 9 years 4 months old. The oldest account is actually the credit line for these two I'm asking about. 


If these are your oldest accounts, how old will your oldest account be if you delete these accounts?

Message 5 of 11
Member

Re: Are these old closed accounts hurting me more than they’re helping? Dispute them to get deleted?

Here's what it looks like:

 

Sallie Mae Account 1: Opened Date Sep 01, 2006

Sallie Mae Account 2: Opened Date Sep 01, 2006

American Education Services Account: Opened Date Sep 15, 2006

 

I would only want to delete the 2 Sallie Mae accounts, since the American Education Services account is one credit line for the two SM accounts, which started showing up after I rehabilitated the SM accounts. So if I were to delete those two SM ones, the oldest one would be the AES account (~9 years 4 months).

Message 6 of 11
Established Contributor

Re: Are these old closed accounts hurting me more than they’re helping? Dispute them to get deleted?

It will be helpful to compare what your average age of accounts is with and without those accounts.   Do you know what your FICO scores currently are? Have you verified that those accounts are still showing negative information? 

Message 7 of 11
Member

Re: Are these old closed accounts hurting me more than they’re helping? Dispute them to get deleted?

I don't think the two SM accounts are considered in the calculation for average age of credit. They don't show up in CreditKarma's 'credit factors' when calculation the average age. Here's a screenshot. 

 

My FAKO scores in CreditKarma are 709 and 688. I know those are not actual FICO scores, but my FICO score shown by Barclays card is 692, last updated December 2015. 

Message 8 of 11
Member

Re: Are these old closed accounts hurting me more than they’re helping? Dispute them to get deleted?

Also, no I haven't verified if those SM accounts are showing negative information. I checked Equifax on January 05, 2016 and the two SM accounts show status as "PAYS AS AGREED", even though the accounts are closed and are now essentially the AES credit line. They don't show any payment history and "Date of First Deliquency" shows as "N/A".

 

However, comparing a report from myFICO on August 5, 2014 that I saved as a PDF, they also say "Pays account as agreed" but DO show payment history for the previous 7 years.

Message 9 of 11
Senior Contributor

Re: Are these old closed accounts hurting me more than they’re helping? Dispute them to get deleted?


@fedor wrote:

However, I have 11 accounts total (closed and open). If I remove them, it’ll bring me down to the “Poor” grade for total # of accounts.. So should I close them and open a couple credit cards (that I’ll never use or ever pay interest on)?

Don't fret over what CK indicates as the ranking for your number of accounts.  Also note that even CK indicates the number of accounts has a low impact.  Do not open accounts just because of what CK states.

 

Payment History is the biggest factor.

http://www.myfico.com/crediteducation/whatsinyourscore.aspx

 

Take a look at the accounts.  If they have negative payment history associated with them then that is likely to have a bigger impact.

 


@fedor wrote:

If I open new accounts it’ll bring my “Age of Credit History” down. Though, the last credit line I opened was in 11/2015, so I don’t think the average will go down too much if I open them soon.



@fedor wrote:

I don't think the two SM accounts are considered in the calculation for average age of credit. They don't show up in CreditKarma's 'credit factors'


 

Also keep in mind that CK only considers open accounts so it's actually AAoOA.  Most creditors use a FICO.  Mortgage lenders definitely use FICO.  FICO considered closed accounts in AAoA.

 

Calculate your AAoA with and without the accounts to understand the impact to your AAoA.  If you don't want to do this manually you can use a spreadhseet and its date functions or you can use an online AAoA calculator.  Do not rely on what CK states as your average age.

 


@fedor wrote:

My FAKO scores in CreditKarma are 709 and 688. I know those are not actual FICO scores, but my FICO score shown by Barclays card is 692, last updated December 2015. 


Don't just consider FAKO versus FICO.  The specific scoring model and relevance of  given model to a given creditor/product is what really matters. Barclaycard provides a TU FICO 8.  It is only relevant to creidtors/products that use a TU FICO 8.  A score generated by any other model or based on any other CRA's data will not be relevant.  Similarly, CK's Vantagescores are only relevant to creditors that use a TU or EQ VantageScore 3.0.  Mortgage lenders will not use any of those scores.

 

See also the Understanding FICO Scoring Subforum and its stickies for info on the various FICO models used by creditors.  You cannot use a score geenrated by one model to determine a score generated by a different model.

  


@fedor wrote:

Also, no I haven't verified if those SM accounts are showing negative information.


You can use CK for this.  You need to drill down into each account's detailed info.  Payment History will be indicated.  However, CK doesn't cover Experian.  Make sure you're also considering your Experian report.

Message 10 of 11
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