Cancel useless cards to increase Average age of accounts?

[Anonymous]

I currently have 15 various credit cards, installment loans, line of credit accounts. All are active and in good standing, but some of those accounts were set up in the last 6 months. Two of which are Target ($300 limit, open 5 mos) and Indigo ($300 limit, around the same time). The next closest credit limit I have is 1200 and the highest credit limit is 20k. 

It looks like, if I drop the Target and Indigo Cards, I'll gain a whole year of average age (4 years vs 3). Is it worth it to cancel them both? I never use them and realized belatedly with Indigo that 300 is their ceiling. Planning to let the rest of my accounts age and not put in apps for anything else until at least the end of 21.

[thornback]

Hi and welcome to the forums.

Closing them won't immediately change your average age of accounts (AAoA).  Closed accounts will remain on your reports for ~10 years after the date of closure, during which time they continue to age and factor into your age of accounts. 

You'd have to have the tradelines fully deleted from your reports to have any effect on AAoA - which is unlikely. 

[Anonymous]

Ooooh, see I thought it was based on Active Accounts. Thanks for the welcome!

[AllZero]

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@Anonymous wrote:

I currently have 15 various credit cards, installment loans, line of credit accounts. All are active and in good standing, but some of those accounts were set up in the last 6 months. Two of which are Target ($300 limit, open 5 mos) and Indigo ($300 limit, around the same time). The next closest credit limit I have is 1200 and the highest credit limit is 20k. 

It looks like, if I drop the Target and Indigo Cards, I'll gain a whole year of average age (4 years vs 3). Is it worth it to cancel them both? I never use them and realized belatedly with Indigo that 300 is their ceiling. Planning to let the rest of my accounts age and not put in apps for anything else until at least the end of 21.

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@Anonymous  Unfortunately, it does not work that way. Once closed, revolving accounts can stay up to ~10 years on your credit reports. It will be included in your age metrics. e.g. AAoA, AoYRA, etc.

I would recommend reading the below from Birdman7
General Scoring Primer and Version 8 Master Thread, pub.5.17.20

[AllZero]

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@thornback wrote:

Hi and welcome to the forums.

Closing them won't immediately change your average age of accounts (AAoA).  Closed accounts will remain on your reports for ~10 years after the date of closure, during which time they continue to age and factor into your age of accounts. 

You'd have to have the tradelines fully deleted from your reports to have any effect on AAoA - which is unlikely. 

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[thornback]

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@AllZero wrote:

😂😂

[thornback]

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@Anonymous wrote:

Ooooh, see I thought it was based on Active Accounts. Thanks for the welcome!

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Yeah all accounts - open, closed, and even derogatory chargeoffs are included (except collection tradelines). 

Once you open an account - the damage (inquiries / aging factors) is done.   

I'd still consider closing useless cards tho - no point in keeping them open if you cannot use them or they can't grow with you.  Once they age beyind 12 months, they'll begin to actually assist in thickening your file and solidifying your AAoA, which will help keep future new accounts from dropping your AAoA as much... so there is a little bit of an upside... and if you don't plan on adding anything new for 2021 anyway, you'll be back over 4 years AAoA before you know it. 

[Brian_Earl_Spilner]

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@Anonymous wrote:

Ooooh, see I thought it was based on Active Accounts. Thanks for the welcome!

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That is the case with VantageScore, not FICO.

[Anonymous]

@thornback That’s the second time I’ve read collection tradelines don’t count towards aging metrics, and I didn’t know that, so I’m just curious from where this knowledge derives?

Has someone tested? Fico docs? Because that's one of the things we were wondering back when we were trying to put together the dirty part of the spreadsheet. 

[RobertEG]

Collections are not "tradelines" of a consumer.

They are accounts established with a debt collector and a CRA to record continued efforts pursuing collection of delinqent debts established on consumer tradelines.

Collections are not included as tradelines under the various OC account scoring categories, such as credit mix, age of accounts, or % util.

However, they are effectively included as continued negative impact under payment history scoring, as they represent continued, and thus extended, delinquency period of OC tradeline delinquencies.

Thus, collections are, for scoring purposes, viewed as extended scoring of payment history derogs that were established under an OC account/tradeline.  They are otherwise not viewed as "tradelines of the consumer."