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Need Advice on closing cards while rebuilding

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805orbust
Valued Contributor

Need Advice on closing cards while rebuilding

Hey Everyone,

 

I thought I'd reach out for some advice.  I've been lurking here for a year or so and am SOOOO grateful for the wealth of knowledge here.  My wife and I began rebuilding about 18 months ago after a losing roughly $500,000 (and our shirts) :-) to some unscrupulous business partners.  Its all over now, and thanks to you guys we're on our way.  So here's my timeline:

 

12/14:   Scores in the 520's across the board

 

2/15:  Got wifey and I each a secured First Progress card

 

6/15:  Bought a new Honda with 5% interest  (Wells Fargo) (scores at 580's)

 

11/15: Approved for a WalMart store card $200 limit.

 

1/16:  Approved for Credit One ($550, raised to $650 in 1 month), Merrick Bank ($550, will double by 7th statement), and Milestone $300  (sucks I know)

 

5/16:  Anniversary, browsed Overstock, bought wifey jewelry, approved for a $2500 limit via SCT.

         Decided to chat with Walmart, received a CLI from $200 to $2500.

 

6/16: Negotiated a PFD with a creditor, scores went to:  EXP - 677, TU - 668, EQ - 661

        Went on a strategic app spree:   AMEX Everyday $1000, Lowe's $1500, Total Rewards $1000, Cabelas $2000, Paypal Credit $2,000

 

All of these are cards I use.  I do heavy usage and PIF all the time.  Never show more than 15% Utilization.  I'm happy, in the garden for 2 years (except for soft pull CLI).  My question is:  When do I cancel the First Progress, Credit One, and Milestone?  All of the new ones have no annual fee.  I'll keep the Merrick because the limit can increase, however, are all these others now useless to me?  Just got my updated 3B report and it has me getting over 700 by the spring by just standing pat.  Should I even wait for them to turn 1 year old?

 

Any advice appreciated... I love you guys!!!

       

 

 



Message 1 of 13
12 REPLIES 12
Anonymous
Not applicable

Re: Need Advice on closing cards while rebuilding

If you close them your AAoA will take an even bigger hit than it did adding all of the accounts. Before closing anything I'd see if you can get the annual fees waived. After a year the inquiries will drop and your accounts will all be over a year old so you're AAoA will look a little better. If they are willing to waive the annual fee's it would look good to have a few older accounts reporting 0 with a long history. your accounts were opened in Jan and Feb so I'd wait till December and ask about the Annual fees. Congrats on the approvals!
Message 2 of 13
Anonymous
Not applicable

Re: Need Advice on closing cards while rebuilding

Good credit will remain on your credit history for 10 years. You can close the cards.

 

Realistically, you only need 3 open, 1 showing ~10% and an installment loan reporting to continue to garden effectively. You've definitely got that without the subprimes that you're paying fees for.

 

Congrats on all your hard work.

 

Heart

Message 3 of 13
805orbust
Valued Contributor

Re: Need Advice on closing cards while rebuilding

Good advice. Guess in 10 years it won't matter since it's all about the same age anyway. Nice.


Message 4 of 13
Anonymous
Not applicable

Re: Need Advice on closing cards while rebuilding


@Anonymous wrote:
If you close them your AAoA will take an even bigger hit than it did adding all of the accounts. Before closing anything I'd see if you can get the annual fees waived. After a year the inquiries will drop and your accounts will all be over a year old so you're AAoA will look a little better. If they are willing to waive the annual fee's it would look good to have a few older accounts reporting 0 with a long history. your accounts were opened in Jan and Feb so I'd wait till December and ask about the Annual fees. Congrats on the approvals!

No, it will not. This is a common credit myth. FICO includes all closed accounts in your AAoA calculation. If the accounts are under a year old, then closing them will NOT hurt you in the least. Just make sure you have at least three open accounts.

Message 5 of 13
805orbust
Valued Contributor

Re: Need Advice on closing cards while rebuilding

Hey Norman,

Glad to have your feedback on this. I've appreciated it while lurking. So technically I won't be hurt by closing these. That's good because all my current cards have been opened within a year of each other so it shouldn't make much difference 10 years from now like you said. Good stuff. I'm definitely closing all 3 right away as I've heard Milestone never moves and Credit One is a general nightmare. Thanks!


Message 6 of 13
Anonymous
Not applicable

Re: Need Advice on closing cards while rebuilding

I want to be SURE I understand this....

 

So if I get say a comenity store card for $500/let's say...Gander Mountain.  This reports on one or more bureaus.  I can then close that account and the card along with it's high limit will just hang on my account for 10 years?  And that amount will add to my total available credit?  

 

I ask because I know I went a little overboard with the SCt....definitely don't need all these cards. 

Message 7 of 13
Anonymous
Not applicable

Re: Need Advice on closing cards while rebuilding

Once you close a card on good standing it will stay on your reports for another 10 years BUT the credit on that card will not be added to available credit
Message 8 of 13
805orbust
Valued Contributor

Re: Need Advice on closing cards while rebuilding

Yes.  It stays as a positive account, but the credit limit doesn't factor into your open balances or available credit.



Message 9 of 13
Anonymous
Not applicable

Re: Need Advice on closing cards while rebuilding

Close the subprime cards. If I were in your shoes I would have it done it yesterday! Those subprime cards will not grow with you and some lenders might hold it against you. I had discover tell me they couldn't approve me because of a low limit secured card, again ymmv.

But you got some nice cards with no annual fees and just keep those. Even closed they won't hurt your score and in 61 days you can request a 3x CLI with Amex and make up for the loss of available credit from the subprime close out
Message 10 of 13
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