About closed accounts, 10 years risk free?

[mikesonthemend]

Just read @5kRunner 's post : https://ficoforums.myfico.com/t5/Credit-Cards/Closed-4-accounts-this-morning/td-p/5595782

A hypothetical question. Suppose you went on a drunken app spree and opened a few revolvers you really have no use for, you just needed to see "approved" in order to feel good about your efforts to improve your score. Not saying anyone ever does anything like that.

Do you just get to have these positive TLs for 10 years? I realize utilization math, and no more payments being reported, but....

Say you have 12 accounts, all fairly new if not out right brand new. You decide to close the 5 newest of them, all paid in full, never late, just only open for a few months. I have seen differing opinions on the effect this will have on AAoA, AoOA, and AoNA.

How would this look going forward? From a FICO standpoint and from a manual review standpoint.

Why would someone do this? Perhaps they opened accounts it turn out they didn't need. Perhaps they have decided to only use cards that provide a benefit, whether rewards wise, or instant savings at checkout.

Appreciate your feedback!

[Anonymous]

Something that people don’t take into account when closing accounts is that while they can stay on there up to 10 years (and sometimes longer), they also can up and vanish much sooner if the lender takes them off. The closure won’t immediately affect age factors, only when it falls off. 

As for looks? It looks like you churned the cards and burned them in a manual review. It’s not a good look. 

[mikesonthemend]

---

@Anonymous wrote:

Something that people don’t take into account when closing accounts is that while they can stay on there up to 10 years (and sometimes longer), they also can up and vanish much sooner if the lender takes them off. The closure won’t immediately affect age factors, only when it falls off. 

As for looks? It looks like you churned the cards and burned them in a manual review. It’s not a good look. 

---

Thanks, Sr. Contributor!

[Anonymous]

Funny how people keep pointing that out. You’ll get there too @mikesonthemend! You just need somewhat less of a life!

[AverageJoesCredit]

Yes, some lenders might hold a grudge and delete your account from reporting. Just ask Credit One

[Anonymous]

Here are the known causes of unexpected detetion of closed accounts well before the ten year mark (ten years after closing):

The consumer gets into a dispute over something on that closed account.  Rather than tussle with the consumer over the exact correct reading of the record, the creditor deletes the entire account, rather than correcting the disputed aspect of the record.  This might be over a true derog (e.g. a late payment three years ago) but it might be something that is not a derog (wrong date opened, etc.)   Contributor Thomas Thumb can gives us a case study of this happening to him.

The consumer gets into a dispute over a related account.  A common example might be two duplicate accounts, where there should only be one.  (Two closed accounts, one with a long history and the other erroneously has a recent date opened.)  The consumer wants the dupe deleted.  But the creditor ends up accidentally deleting both of them.   

The particular CRA experiences massive problems in its database and something screwy happens where several of your closed accounts get deleted.  This is very rare but it happened to contributor SouthJamaica with Equifax a few years ago -- maybe in March 2015?   I remember it coincided with all kinds of weird stuff happening on EQ's back end.

I don't believe I have heard of any other cases, though it would be interesting if we had a single thread that collected case studies like this.

I think the bottom line is that in 99% of the cases a closed tradeline will stay on until almost exactly 120 months after closure.