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Does closing a card that is less than 2 months old help AAOA?

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Drifter73
Frequent Contributor

Does closing a card that is less than 2 months old help AAOA?

Curious, reviewing my file, I realized I pulled the trigger on a card I may never use in near future (it's more of 2 years away possible use card). I'm not worried about my dti or Utilization being effected as I stay close to 6% all the time anyways.

 

However, that 2 month old card lowered my AAOA. 

 

So the question is, if I close it now, will my AAOA go back up, or will I need to wait 2 years for it to adjust? Might as well keep it if I have still have to ride it out, but would rather close it if my AAOA will go backnup.

 

Any other negatives I'm overlooking closing a 2 month old card? (E.g. what a uw might think on next app seeing a 2 month account closure.)

 

I appreciate any input everyone has. Thanks in advance.










Message 1 of 9
8 REPLIES 8
FinStar
Moderator Emeritus

Re: Does closing a card that is less than 2 months old help AAOA?

No, closing a card would have no effect on AAoA. In other words, closing the account will not make your AAoA go up. It is still factored into the AAoA metrics regardless (open/closed)

Message 2 of 9
Drifter73
Frequent Contributor

Re: Does closing a card that is less than 2 months old help AAOA?


@FinStar wrote:

No, closing a card would have no effect on AAoA. In other words, closing the account will not make your AAoA go up. It is still factored into the AAoA metrics regardless (open/closed)


Thanks. Might as well keep then. Maybe put a few bucks on it every 3 months until I need it in 2 years.

 

 










Message 3 of 9
FinStar
Moderator Emeritus

Re: Does closing a card that is less than 2 months old help AAOA?


@Drifter73 wrote:

@FinStar wrote:

No, closing a card would have no effect on AAoA. In other words, closing the account will not make your AAoA go up. It is still factored into the AAoA metrics regardless (open/closed)


Thanks. Might as well keep then. Maybe put a few bucks on it every 3 months until I need it in 2 years.

 


I mean, buyers remorse does happen from time to time. Which card was it?

As far as UW goes, if you opened and closed a slew of accounts in a very short period, then I'm sure algorithms or manual review may raise an eyebrow or two. 

Might as well put some usage and build history and then consider things after 6 months or so.

Message 4 of 9
Drifter73
Frequent Contributor

Re: Does closing a card that is less than 2 months old help AAOA?


@FinStar wrote:

@Drifter73 wrote:

@FinStar wrote:

No, closing a card would have no effect on AAoA. In other words, closing the account will not make your AAoA go up. It is still factored into the AAoA metrics regardless (open/closed)


Thanks. Might as well keep then. Maybe put a few bucks on it every 3 months until I need it in 2 years.

 


I mean, buyers remorse does happen from time to time. Which card was it?

As far as UW goes, if you opened and closed a slew of accounts in a very short period, then I'm sure algorithms or manual review may raise an eyebrow or two. 

Might as well put some usage and build history and then consider things after 6 months or so.


It was the Citi HomeDepot card. But I dont need it until I buy some property in 2 years. So, a bit too trigger happy on that one.

 

I'll build it up and maybe have a larger limit by the time I actually need it.

 

Thanks for the insight.










Message 5 of 9
FinStar
Moderator Emeritus

Re: Does closing a card that is less than 2 months old help AAOA?


@Drifter73 wrote:

@FinStar wrote:

@Drifter73 wrote:

@FinStar wrote:

No, closing a card would have no effect on AAoA. In other words, closing the account will not make your AAoA go up. It is still factored into the AAoA metrics regardless (open/closed)


Thanks. Might as well keep then. Maybe put a few bucks on it every 3 months until I need it in 2 years.

 


I mean, buyers remorse does happen from time to time. Which card was it?

As far as UW goes, if you opened and closed a slew of accounts in a very short period, then I'm sure algorithms or manual review may raise an eyebrow or two. 

Might as well put some usage and build history and then consider things after 6 months or so.


It was the Citi HomeDepot card. But I dont need it until I buy some property in 2 years. So, a bit too trigger happy on that one.

 

I'll build it up and maybe have a larger limit by the time I actually need it.

 

Thanks for the insight.


It's a good card to have, IMO. CLIs are HP, but it can grow. All kinds of financing promos if such ever comes to be a need.

 

At least you have it now so that you don't have to apply for it in the future. You can purchase light bulbs, batteries or whatever to keep it active.

Message 6 of 9
KangiCosmos
New Contributor

Re: Does closing a card that is less than 2 months old help AAOA?

Who knows. You might want to get a few things before then that would be more expensive in 2 years. Every year some products brands are changed like this year a certain brand of mulch was changing their product so the mulch went on clearance price for$2.00 a bag. So we bought 2 pallets of the red brick mulch and one pallet of the black mulch beginning of summer. And now have some already fro next year. The mulch was originnaly $7dollars a bag. We also bought a pallet of 12 x12 red brick pavers for a project for next year that went on clearence.




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Message 7 of 9
SouthJamaica
Mega Contributor

Re: Does closing a card that is less than 2 months old help AAOA?


@Drifter73 wrote:

Curious, reviewing my file, I realized I pulled the trigger on a card I may never use in near future (it's more of 2 years away possible use card). I'm not worried about my dti or Utilization being effected as I stay close to 6% all the time anyways.

 

However, that 2 month old card lowered my AAOA. 

 

So the question is, if I close it now, will my AAOA go back up, or will I need to wait 2 years for it to adjust? Might as well keep it if I have still have to ride it out, but would rather close it if my AAOA will go backnup.

 

Any other negatives I'm overlooking closing a 2 month old card? (E.g. what a uw might think on next app seeing a 2 month account closure.)

 

I appreciate any input everyone has. Thanks in advance.


No, closing it will not raise your AAoA. 

 

No, I don't think an underwriter would care one way or the other about your closing it.

 

The negatives would be losing the limit from your revolving utilization percentage calculation and losing the zero balance from your accounts with balance calculation.


Total revolving limits 741200 (620700 reporting) FICO 8: EQ 701 TU 704 EX 687

Message 8 of 9
RealEstateGuy89
Frequent Contributor

Re: Does closing a card that is less than 2 months old help AAOA?

@Drifter73  No, unfortunately your AAoA will not go back up if you close the account.  As a matter of fact, it will be calculated in your AAoA for the next 10 years or until it falls off your reports.  I've had my Home Depot card now for five years and I've grown it to an even $20,000... so I would say that it definitely has some good opportunities for growth. 

Message 9 of 9
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