Re: Closing Newer accounts- Will it affect average... - myFICO® Forums

cadavis0609 · ‎10-25-2016

My wife and I have been following the Dave Ramsey plan except that we still recognize the need to maintain our credit for future home purchases and what not. As of now, we have zero balance across all credit cards. My oldest credit card account is Barclays which was opened in 2013 and is also my highest limit so that was the one that I intended to hold onto but if I close all other cards, does that affect my average age of accounts at all? I would think that it wouldn't since they are all newer than this card but I can't be sure.

Sept 07 EQ 419

April 2012 EQ- 669 EXP- 680 TU-700= Proud New Homeowner!

Pway · ‎10-25-2016

These accounts will remain on your reports for ten years. However, you will see a significant dip in your scores if you decide to close all accounts but one.

Thank you for the wealth of knowledge I have learned from these forums. I am logging off as of November 9, 2022. I wish everyone great success.

Anonymous · ‎10-25-2016

No. Closing your other two cards will not affect your AAoA. The closed counts will continue to count just as much toward your AAOA as the open ones, and furthermore they will continue to age as well.

In about ten years (possibly sooner but probably not) the two closed accounts will fall of your reports, so bear that in mind too.

Would you be willing to discuss your plans further with us? While closing two of your three cards will not harm your AAoA, there are other ways it will be a bad choice for your ability to secure best terms for homes and auto loans down the road.

Congratulations for perceiving value in DR's appraoch, but at the same time discerning weaknesses in his rabid anti-CC religion, and finding ways to incorporate shrewd steps in your self-interest while retaining everything that is good about his advice.

The big thing DR has to give people is the insight that credit cards induce everyone to buy things they don't need, purchases they would not make if they had to haul actual cash out of their wallet and watch it disappear into the cash register. That is a powerful insight. Coupled with that is his insight that some people are especially vulnerable to havings CC's, even more so than the rest of us.

There's a way to keep all three CCs alive (very much in the interest of your future credit-worthiness) while at the same time preventing yourself from ever using them for day to day purchases (thus achieving much the same result as you closing them). Let the folks here know if you want further details.

Dalmus · ‎10-25-2016

No, closing those cards won't affect your AAoA. They will continue to report and "age" for up to 10 years.

That being said... To maximize your FICO score for a future house purhase, I believe that you'll want more than one card reporting.

Current FICO 8 Scores: EQ: 828| TU: 805 | EX: 814

cadavis0609 · ‎10-25-2016

I don't care about scores so much as just having *A* score. It was, afterall, the pursuit of this imaginary arbitrary number that put me in the bind I was in and actually put me in financial trouble. The score remained high even though I struggled to pay my bills every month! Some measure of "financial fitness"... I believe that this entire FICO scoring system is designed to keep us in debt and bound to the rat race. It is afterall designed by powerful banks who benefit from being able to screw us. I'm with Dave that credit cards are evil and if you have money, you don't need them.That said, I still live in America and still have to be able to play until I reach a point where I have enough money to tell them to bite me, hence my reluctant willingness to participate in this garbage system. Our overall financial picture is fantastic now and only stands to get better. My scores presently are all 720+, our debts are now limited to our vehicles, the house and my wife's student loans. All of these will likely be paid off by December of next year except the house. We make ~$150k/year. I have a hard time believing that I would be denied a mortgage with a 2/3 down payment and a fico above 700. I just don't want to see 100 point drop when I close all the paid off cards that I used for their zero percent interest.

Sept 07 EQ 419

April 2012 EQ- 669 EXP- 680 TU-700= Proud New Homeowner!

RobertEG · ‎10-25-2016

The consumer has no control, after closing of an account, over subsequent decisions by the creditor to report total deletion to the CRA.

If the creditor decides to delete the account reporting, then of course the account will cease to be included in any category of scoring.

Creditors often choose to delete dead accounts in order to simply their reporting and remove any obligation to monitor the account for possible needed updates or to have to investigate any possible dispute that might be filed by a consumer.

You take the risk, once you close an account, that the account could be deleted.

Anonymous · ‎10-25-2016

You will have a FICO score and your AAoA will be unchanged.

No one here can reliably predict how much your mortgage scores will go down when you cancel two of your three cards. It's not certain to me that you know what your mortgage scores are. (You mention having a FICO score of 720, but since there are many FICO models, and for each model three different scores -- one for each bureau -- the single 720 number may mean less than you hope.)

We may not be able to help you much, beyond actually answering what you asked, since you are firmly in Dave's camp. (Credit cards are evil, FICO is in an Illuminati-style conspiracy with the big banks, there is no way to have a few credit cards and yet be virtually debt free and totally interest free -- all standard DR talking points it sounds like. None of those things are true, but they certainly form the basis of a coherent worldview.)

As you saw I am actually very sympathetic to some of DR's perspective, far more than you are likely to get on here. I sensed that your interest in having one CC (in opposition to the DR party line) suggested you might have a similar openness to ideas from the other side of the isle, but I may be mistaken. Regardless I wish you every good thing with your financial life and plans for a home purchase. Good luck!

SouthJamaica · ‎10-25-2016

@cadavis0609 wrote:
I don't care about scores so much as just having *A* score. It was, afterall, the pursuit of this imaginary arbitrary number that put me in the bind I was in and actually put me in financial trouble. The score remained high even though I struggled to pay my bills every month! Some measure of "financial fitness"... I believe that this entire FICO scoring system is designed to keep us in debt and bound to the rat race. It is afterall designed by powerful banks who benefit from being able to screw us. I'm with Dave that credit cards are evil and if you have money, you don't need them.That said, I still live in America and still have to be able to play until I reach a point where I have enough money to tell them to bite me, hence my reluctant willingness to participate in this garbage system. Our overall financial picture is fantastic now and only stands to get better. My scores presently are all 720+, our debts are now limited to our vehicles, the house and my wife's student loans. All of these will likely be paid off by December of next year except the house. We make ~$150k/year. I have a hard time believing that I would be denied a mortgage with a 2/3 down payment and a fico above 700. I just don't want to see 100 point drop when I close all the paid off cards that I used for their zero percent interest.

I agree with your overview, but as long as you're planning to get another mortgage in the future you're still playing in this "garbage system". Even if you rent an apartment, or cosign for someone who's renting an apartment, or if you go for car insurance or a cell phone or go for a car lease or car loan... you're playing in the system whether you like it or not.

Having higher FICO scores will give you lower interest rates when you go for a mortgage and will help in those other things.

Keeping the credit cards in a sock drawer, using them once every 3 months or so to keep them active, will enhance your score. Closing them will reduce your scored. It's just that simple.

If you didn't care, I don't think you would have started this thread.