Equifax dropped 77 points of my credit because I closed a credit card?

[KCC100]

Hello friends, I had four open credit card. The oldest was Bank of America, 9 years, Capital One 8 years and another two credit cards. Now I decided to close Bank of America because I don't use it and it is the smallest credit line compare to the other one, so I call them and they closed it. There was no balance and my over all balance of my credit cards is at 4%. Basically I have no balance at all. two credit cards has very small balance. 

Now today I received an email from both Credit Karma and Myfico. Credit Karma shows that I lost 77 points Equifax score, but I didn't loose anything on Transunion. On the other hand Myfico shows that I lost 10 points from Equifax and 2 points from the other two company because of closing Bank of America.

Any idea on why this thing happened? Should I call bank of america back and ask them to reopen my credit card again? It looks like a monopoly if we cannot close  cards we don't need. 

Thanks a lot.

[thornback]

FICO is the only score that really matters so be grateful the largest drop there was only 10 points - you can make that up with time.

I don't know if BOA will simply reopen the account - but it's certainly worth calling and asking.

[KCC100]

Friend, So I have to pay this stupid anual charges from bank of america to keep my credit score the same? And I think Credit Karma has some kind of error because I did not loose scores from Transunion nad experience vantage score but I lost 77 points on equifax, I think something wrong with their system.

[thornback]

Unfortunately, yes, you'd have to keep paying for the AF. -- Or, if they are willing to reopen the account, see if they'll allow a product change to a card with no AF.

Also - even though the scores are all Vantage- each bureau customizes the model with their own silly algorithms, so it's common to see differences (though 77 points is quite a drop!).

[Anonymous]

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wrote:
Never ever close your oldest card. Doing so made your average age of active accounts drop. That's where you lost points. FICO is the only score that really matters so be grateful the largest drop there was only 10 points - you can make that up with time.

I don't know if BOA will simply reopen the account - but it's certainly worth calling and asking.

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I'm a bit confused now.  I thought closing oldest account does not hurt your fico until when it's due to fall off which is around a 10 year period.  I'm thinking of closing my oldest card right now since it is a secured card with Wells Fargo.  It's has been almost 2.5 years and still has not graduated.  I don't need it or feel like paying the AF for something that has been in my socks drawer for the past year.  

Also OP,

Don't worry about Credit Karma.  Their scores are garbage.  For example, several of my accounts were updated as paid to zero balance and I received notification that my scores with CK dropped 45 points.  Just use CK for notification purposes only.

[thornback]

There's the overall age of your report -- wherein a closed account will still be factored; and the age of active history of your report -- which may be shortened due to the closing of the oldest card.

From Transunion:

"Try not to close the oldest account on your credit reports. This could shorten your active credit history and damage your score."

[Anonymous]

From what i understand,

Vantage scores (such as credit karma) are affected when you close a card because vantage scores use Average Age of OPEN Accounts.

Fico scores are not affected because they keep reporting for 10 years, the 10 and 2 point drop could be anything like a small change in util...

But i could be wrong....

[thornback]

@

empire777

 wrote:

From what i understand,

Vantage scores (such as credit karma) are affected when you close a card because vantage scores use Average Age of OPEN Accounts.

Fico scores are not affected because they keep reporting for 10 years, the 10 and 2 point drop could be anything like a small change in util...

But i could be wrong....

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You're not at all wrong. Closed accounts still count for age factors... which is why, I presume, OP's score loss was minimal.  But from what I understand, an aged open account carries more weight than an aged closed account.  Active accounts in good standing, in general, carry more weight.  Of course, I could also be very wrong. 

OP - was your utilization 4% before or after the account closed?  

[KCC100]

So what we're talking about is basically 9 months different between my Bank of America and Capital One. 9 years Bank of America and 8 years Capital One. Now as others said an old open account might be more benefitial than a closed old account but still 77 points is quite not acceptible. I still think something is wrong. 

[thornback]

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wrote:

So what we're talking about is basically 9 months different between my Bank of America and Capital One. 9 years Bank of America and 8 years Capital One. Now as others said an old open account might be more benefitial than a closed old account but still 77 points is quite not acceptible. I still think something is wrong. 

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I agree that 77 points seems excessive - given your second oldest account is 8 years turning 9 in 9 months.   Unless it has to do with scorecard rebucketing or something.  I don't know.  I know it's annoying to see, but the Vantage scores really aren't worth worrying about. 

Also -- I found where I read about the weight of active vs. closed accounts:

https://thecreditguy.tv/long-good-credit-history/ 

Length of credit history is made up of the age of oldest account, new accounts, and average age, plus two more;

• How established is your verity of credit is. (installment mortgage revolving, auto loans) FICO looks at what is your oldest established account on each of these types of credit.
• Then FICO also looks at the recent activity of those accounts. If you had an auto loan that was closed five years ago that will not be as beneficial as if you were at the end of a current five-year auto loan.

And  - this excerpt from Big Data MBA

https://books.google.com/books?id=iY0gCwAAQBAJ&pg=PA187&lpg=PA187&dq=FICO+also+looks+at+the+recent+a...

So, it seems to me (and it makes sense) that, while it's still a factor, a closed account holds less weight than an open one - and, if true, that could very well account for the small dip in scores.  As well as a reduction in credit limit - even if it didn't heavily effect util.    The drop could also be due to destablization of your report -  some of those points may come right back in a few days.