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Closing CC's that are not used vs being CLD due to not using them (Which is worse?)

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Repo-ed
Senior Contributor

Closing CC's that are not used vs being CLD due to not using them (Which is worse?)

Hey guys, I'm wondering your thoughts/experience about closing CC accounts that are never used vs leaving them open for their + impact on AAoA vs creditors decreasing CL's?

 

I have WAY more available credit than I probably should, but I only use 2-3 of the MANY cards I have. I keep between 1-3%/mo reporting

 

I own my 2 homes and 3 vehicles outright and my current scores are 800+ across the board.

 

My fear is my accounts being CLD to death and THAT impacting me more than me closing them.

 

My intial thoughts are just destroy the cards and leave the accounts alone, but if I don't use them, then they aren't being reported w/ the exception of their opening year?

 

Your thoughts, please?

5/2012: 560 credit scores across the board
12/2014: 750+
3/2017: 780+
11/2019: 833
2/2023: Experian via Chase United Explorer CC pull - 891
23 REPLIES 23
sznthescore
Established Contributor

Re: Closing CC's that are not used vs being CLD due to not using them (Which is worse?)

Congratulations on owning your homes and vehicles outright! 🥳 Account(s) open or closed will still count against your AAoA for up to 10 years. Since, you keep a 1-3% utilization, I see minimal effect on your scores. Others will chime in, but considering how you manage your utilization I see minimal if any effects. So it's up to you...

REBUILDER CARDS




Goal: FICO 700+
Message 2 of 24
GApeachy
Super Contributor

Re: Closing CC's that are not used vs being CLD due to not using them (Which is worse?)

@Repo-ed You're in a good enough position to do either. If you just don't want to use them occassionally or are not liking the thought of fraud or cld then go ahead and close them.   Sometimes Less is More.

My Take Home Pay Don't Take Me Home
Message 3 of 24
SouthJamaica
Mega Contributor

Re: Closing CC's that are not used vs being CLD due to not using them (Which is worse?)


@Repo-ed wrote:

Hey guys, I'm wondering your thoughts/experience about closing CC accounts that are never used vs leaving them open for their + impact on AAoA vs creditors decreasing CL's?

 

I have WAY more available credit than I probably should, but I only use 2-3 of the MANY cards I have. I keep between 1-3%/mo reporting

 

I own my 2 homes and 3 vehicles outright and my current scores are 800+ across the board.

 

My fear is my accounts being CLD to death and THAT impacting me more than me closing them.

 

My intial thoughts are just destroy the cards and leave the accounts alone, but if I don't use them, then they aren't being reported w/ the exception of their opening year?

 

Your thoughts, please?


1. If you close them or if the lender closes them, they will continue to be factored into you average age of accounts for as long as they remain in your reports, which is usually many years down the road.

 

2. I don't really see the problem with CLD's. If one of your unused accounts gets CLD'd, and you feel the lower limit adversely affects your scores, you can close it then.

 

3. If there's an annual fee on the card, or if you'd rather not bother keeping an eye on the account, I'd close it; otherwise, I'd just leave them alone.


Total revolving limits 741200 (620700 reporting) FICO 8: EQ 703 TU 704 EX 687

Message 4 of 24
AndySoCal
Valued Contributor

Re: Closing CC's that are not used vs being CLD due to not using them (Which is worse?)

@Repo-ed  Credit cards that are not being used for a prolonged length of time lets say a year or more. Each creditor has their own definition of when an account becomes inactive (dormant).  Some creditors will decrease the credit limit .Still no use on the account close the account. With credit  cards most if not all have a zero fraud liability.  So with an account not being used then the account has fraud. The larger the limit the larger the potential liability in case of fraud on the account hence the CLD. Implied is if you are not using the account you do not need the large credit limit.

For me if I know or think will not use the card again. I will wait a few months to be sure then close the accounts. If that card(s) are stored on website you have bought from remove the card.   I do not keep open credit cards that I do not use,

 

 

FICO Scores XPN v8 802 V2 831 (SDFCU) TUC 803 v8 EFX 807 (10/2023)
Discover 09/90 19,000, JCPenney 10/2008 4,700 US Bank Cash 12,000 Citibank Custom Cash 5/2015 11,100 State Dept. FCU 15,000 06/2023 , 02/2024 Redstone FCU Signature VISA 10,000 Banking: Ally Bank Credit Unions: Lafayette FCU Fortera FCU State Department FCU Pelican CU

Pelican State CU Redstone FCU

Message 5 of 24
PayAndProsper
Regular Contributor

Re: Closing CC's that are not used vs being CLD due to not using them (Which is worse?)

@Repo-ed 

There have been many great suggestions and feedback given already. I'd just like to add:

  • If there are AFs that you do not want to pay, consider PCing to a card that you will be able to get more use out of or that that has no AFs
  • You could simply set up some small recurring charge (subscriptions, Amazon gift card balance) to potentially keep the card active indefinitely, so as not to lose thickness on your profile
  • Keep in mind that more older accounts will act as a buffer if you ever decide to use your credit to open a new TL, further limiting impact to your AAoA
  • You have already taken the HP and new account hits for said accounts
  • If, after considering all that, you are sure you still would rather close the TLs, in good standing, they should still positively contribute to your CR for ~10 years

 

 

My question is: in what way do you anticipate closing the TL to be better than a CLD? If you were concerned about the hit to utilization, does closing the TL entirely not increase the total utilization ratio more than a CLD would? I'm just trying to understand the downside to keeping a TL open (aside from management--which can be made basically automatic--and AFs).


Utilization Stats:

Current FICO® Score 8:

Goal FICO® Score 8:


Financial Institutions:

Message 6 of 24
Catbird_Seat
Contributor

Re: Closing CC's that are not used vs being CLD due to not using them (Which is worse?)


@PayAndProsper wrote:

@Repo-ed 

There have been many great suggestions and feedback given already. I'd just like to add:

  • If there are AFs that you do not want to pay, consider PCing to a card that you will be able to get more use out of or that that has no AFs
  • You could simply set up some small recurring charge (subscriptions, Amazon gift card balance) to potentially keep the card active indefinitely, so as not to lose thickness on your profile
  • Keep in mind that more older accounts will act as a buffer if you ever decide to use your credit to open a new TL, further limiting impact to your AAoA
  • You have already taken the HP and new account hits for said accounts
  • If, after considering all that, you are sure you still would rather close the TLs, in good standing, they should still positively contribute to your CR for ~10 years

 

 

My question is: in what way do you anticipate closing the TL to be better than a CLD? If you were concerned about the hit to utilization, does closing the TL entirely not increase the total utilization ratio more than a CLD would? I'm just trying to understand the downside to keeping a TL open (aside from management--which can be made basically automatic--and AFs).


Depending on someone's credit profile or even the creditors within their profile, a CLD can set off adverse action by other creditors, with more creditors CLD, which would potentially cause damage to utilization & possibly cards being closed if a creditor is spooked enough. 

Message 7 of 24
PayAndProsper
Regular Contributor

Re: Closing CC's that are not used vs being CLD due to not using them (Which is worse?)


@Catbird_Seat  escribió:

Depending on someone's credit profile or even the creditors within their profile, a CLD can set off adverse action by other creditors, with more creditors CLD, which would potentially cause damage to utilization & possibly cards being closed if a creditor is spooked enough. 


@Catbird_Seat Thanks for responding. That's valid.

 

In the OP's case, with many cards and a thicker profile, I wonder how likely that would be. I also wonder if anyone has seen a string of AA triggered by their own personal CLD request. I know the majority of the people on MF tend to want "more, more, more" when it comes to the CL, but there are some who prefer not to, so much so that some actually request CLD if they feel the exposure is too high.


Utilization Stats:

Current FICO® Score 8:

Goal FICO® Score 8:


Financial Institutions:

Message 8 of 24
Catbird_Seat
Contributor

Re: Closing CC's that are not used vs being CLD due to not using them (Which is worse?)


@PayAndProsper wrote:

@Catbird_Seat  escribió:

Depending on someone's credit profile or even the creditors within their profile, a CLD can set off adverse action by other creditors, with more creditors CLD, which would potentially cause damage to utilization & possibly cards being closed if a creditor is spooked enough. 


@Catbird_Seat Thanks for responding. That's valid.

 

In the OP's case, with many cards and a thicker profile, I wonder how likely that would be. I also wonder if anyone has seen a string of AA triggered by their own personal CLD request. I know the majority of the people on MF tend to want "more, more, more" when it comes to the CL, but there are some who prefer not to, so much so that some actually request CLD if they feel the exposure is too high.


It depends on what creditors are in the profile. Even with an aged profile & high scores, other creators don't know why a card is CLD. During a scheduled SP review of someone's profile, they will see the CLD & it sets off adverse action on their behalf. They don't know what triggered the first CLD & to hedge their bets, they will CLD their card(s) to protect themselves. Also closing cards after the final CLD. Other creditors could follow, setting off a domino effect. 

Message 9 of 24
PayAndProsper
Regular Contributor

Re: Closing CC's that are not used vs being CLD due to not using them (Which is worse?)


@Catbird_Seat  escribió:

@PayAndProsper wrote:

@Catbird_Seat  escribió:

Depending on someone's credit profile or even the creditors within their profile, a CLD can set off adverse action by other creditors, with more creditors CLD, which would potentially cause damage to utilization & possibly cards being closed if a creditor is spooked enough. 


@Catbird_Seat Thanks for responding. That's valid.

 

In the OP's case, with many cards and a thicker profile, I wonder how likely that would be. I also wonder if anyone has seen a string of AA triggered by their own personal CLD request. I know the majority of the people on MF tend to want "more, more, more" when it comes to the CL, but there are some who prefer not to, so much so that some actually request CLD if they feel the exposure is too high.


It depends on what creditors are in the profile. Even with an aged profile & high scores, other creators don't know why a card is CLD. During a scheduled SP review of someone's profile, they will see the CLD & it sets off adverse action on their behalf. They don't know what triggered the first CLD & to hedge their bets, they will CLD their card(s) to protect themselves. Also closing cards after the final CLD. Other creditors could follow, setting off a domino effect. 


This is the reason why I am curious to know if someone has ever triggered that series of events due to a CLD that they, themselves, have requested.

 

It would suck to be limit-chased to card closing all because of an action initiated by one's self.


Utilization Stats:

Current FICO® Score 8:

Goal FICO® Score 8:


Financial Institutions:

Message 10 of 24
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