Quick! Will Paying off and Closing accounts Lower my Mortgage Score?

[Te3030]

I applied for a loan from credit union to consolidate 3 credit cards, I am approved for the loan but the underwriters want me to close the accounts, totaling about $15k they are my oldest accounts. Not sure what to do? 

[Anonymous]

It will lower your score because it will cause the open accounts to re-age from my understanding. Also may be other changes. Did you LO run a score simulator?

[Anonymous]

Well re- age is not precisely the right word. The average age of your accounts will change.

[Te3030]

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@Anonymous wrote:
It will lower your score because it will cause the open accounts to re-age from my understanding. Also may be other changes. Did you LO run a score simulator?

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No, I am preparing to apply for mortgage, paying down credit cards first, but asked for a consolidation loan also so I can pay remaining cards off faster.

[kc0039]

Interesting. A year ago we used to require for the cards to be closed, now we require the cards to have a zero balance and not close them.

[Anonymous]

Right because closing the accounts drops the credit scores. the credit card forum will give OP more specifics.

[JayTee1]

Your accounts won't reage.  Closed accounts in good standing stay on your reports for up to 10 years, and they contribute to your AAOA for the entire length of time they're on there.  I wish people would stop saying that closing accounts affects your AAOA.  That's Vantage, not FICO.

Reducing your available credit would affect your score, however -- potentially.

[Anonymous]

It does reage the age of accounts, personal experience. Do you have personal experience??

[JayTee1]

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@Anonymous wrote:
It does reage the age of accounts, personal experience. Do you have personal experience??

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Closing credit cards does not "re-age" anything in the FICO 8 (or mortgage score) models.  Closed and open accounts make up your AAOA.

Yes, I just closed an account, and my AAOA did not change.  

Firemediii, you're just not correct.  There are many, many threads here going over this.  

[JayTee1]

And here's a sticky thread that goes over it:

http://ficoforums.myfico.com/t5/Understanding-FICO-Scoring/Closing-Aged-Accounts-Yes-It-Is-Ok/m-p/15...