As far as we know, any closed card with a balance is counted by FICO. Specifically it is counted in the scoring factor "Number of accounts with a balance" as well as total revolving utilization. For total U it is considered as if it had a zero credit limit (but the balance is still added to your total revolving debt).
To the extent that FICO models might compare the "number of accounts with a balance" to a larger "denominator", it is virtually certain that this denominator would consist only of open accounts. Thus if Bob has 20 closed accounts, they do not help his "denominator."
The following curious situation could arise, however. Bob has exactly five open credit cards and ten closed credit cards -- no other accounts. All of his closed cards show a positive balance. and exactly one of his open cards has a balance. If FICO uses a ratio, it probably would show (11 accounts with a balance) / (5 open accounts) = 220% of his accounts reporting a balance.
The Lexis Nexis Credit based insurance score has extremely detailed reason codes with multiple penalty breakpoints above 101% in situations like this. My guess is that if FICO looks at ratios of Accounts With a Balance against Total Accounts, it too would ignore closed accounts for the denominator and hence the ratio could go ever 100%.
A lot of people (though not all) are certain that some or all FICO models employ a ratio test (possibly in addition to the raw integer number of accounts with a balance) and there is further mixed opinion about whether open accounts like loans are ignored or not. My feeling is that we'd need very well designed tests from many people before we could have rational degrees of confidence here. There is a meme of "1/3 of revolving" but it's not clear to me whether that might be a claim that propogates on its own in our own echo chamber.
(Side note: I have seen the negative reason code of Too Many Accounts
Reporting a Balance when my ratio is extremely low. That's one reason
I think that the integer number of accounts matters in at least some
Do remember that the factors in the Amounts Owed category (CC utilization, installment utilization, Number of accounts with a balance, etc.) are always based on the instant your report is pulled. There is therefore no long term advantage in trying to keep your CC utilization ultralow or the number of accounts reporting a balance extremely low. Many of us don't worry about that at all except in the 40 days prior to an important credit pull (e.g. before applying for a mortgage, or for a hard to credit card, or whatever).
Hi, if I opened an account to take advantage of promotional financing 5 months ago and paid it off and closed it 3 months ago is that account still considered my youngest account for scoring purposes?
Assuming you have not opened another account since that time, yes.
BM7, I get that negative reason statement when I have just 1 revolver report a balance and my mortgage (which has to report a non-zero balance, of course) which is 2 of 8 or 9 open accounts. Basically, I feel this is a filler/fluff statement that is maybe impacting my score by a point or two, but nothing more.
My newest account prior to that one was a couple years prior. Oh well I checked and it was actually opened in July so I guess I can look forward to a few points when that ages.
If your AoYA was 12 months or greater (which it sounds like it was) prior to opening that account, you likely experienced a 15-20 point drop on your FICO scores from your AoYA going from 12+ months to 0 months. When your current AoYA reaches 12 months again, which it sounds like may happen in July, your FICO scores should increase 15-20 points or so.