AAoA - will closing some new credit cards with low limits improve AAoA without impacting util?

[moods]

hi,

My oldest account has a 5k limit which is 3 years old, I made the mistake for applying for a couple of charge accounts (IKEA, AMAZON) both gave me 300 (one might be 600) anyway I do not really use them and they are only a few months old.

I also have a new WAMU account (1500 limit) which I did a BT transfer which I am about to fully pay off, (I have an older WAMU which is around 2 years old fully paid off 2k limit)) will it make sense closing the newer WAMU account (or merging it with the older one for a higher limit?)

Or will closing the newer accounts not make any difference since it will be still computed with the AAoA?

EDIT- Also regarding UTIL I have around 35-40k in credit card limits between 5-7 cards and an 11k line of credit which has a 10k balance. Now in a couple of days all my cc's will show a 0 balance. But my 11k line of credit will still have a 10k balance.

Thank you! 

Message Edited by moods on 10-13-2008 02:39 PM

[Anonymous]

No. Closing accounts does not remove them from your report nor the average age of account calculation. They will stay on for 10 years even if you closed them today. Once the age damage is done, best to reap the benefit of multiple credit lines in good standing. Over time the AAoA will heal and your score will have an even better foundation. I do recommend you don't open any additional credit you don't need. You should get a decent boost when all your cards are over a year, and if my own experience is anything, a nice bump when your AAoA hits 2 years.

Don't worry, in the long run it will be good that you have multiple accounts opened towards the start of your credit career. Goodluck!

[moods]

thanks for that information, Its just that I have too many accounts that I cannot keep track of even if they are at 0 balance I guess ill just keep them, I was thinking of opening a last discover card to have a good mix, or I might just leave that for later on in life. 

Im not really found of the AAoA concept it really hurts us with fresh credit.

[Anonymous]

A new account hurts in 3 ways

1) It lowers AAoA (time to heal depends on the number of accounts you have and their age)

2) It causes an inquiry (scoring effect gone in 1 year but does not diminish during that year, then off your report in 2)

3) And it hurts your new credit category (impact goes down over a year)

New cards can help by decreasing your utility

and by increasing your credit mix (Discover will not help increase your mix for scoring purposes)

Usually the 2 positives are outweighed by negatives, unless you are new to credit and are opening a new type of revolving account (say first store or gas card)

I recommend you wait on Discover

You can also come up with a spreadsheet or a calender to help you figure out when your bills are due and to keep track of balances. Or simply only use 1 or 2 cards a month and alternate. Whatever system is simple and works for you is the best.

Message Edited by debtisgood on 10-13-2008 05:13 PM