But if that account fell off wouldn't your average age be 9.5? And the following year you'd have 21, 19, 1 and 1 which would raise you up to 10.5 so no real damage done right?
sonicblue wrote:All things being equal, I've done the math (not a score, just on average age), and it is to your benefit (forgetting util) to close any account whose age is LESS than your overall average age of account. Think about it, t=0: you have three accounts, ages 10, 8 and 3 years. The average age is 7 years. Ten years from now, t=10, they'll be 20, 18 and 13 years old, for an average age of 17 years.If at t=0 I close the 3 year-old account, the current average age doesn't change since they don't fall off. But at t=10, the then-13-year-old account will drop off, and my average age of account will be 19 years. This is an increase over the 17 years had I done nothing.I think the argument against is, it's a safe bet that at SOME point in that ten years, you will probably have opened something new. At an extreme, let's say you open two accounts right at t=10. Your account ages will be 20, 18, 13, 0 and 0, for an average age of 10.2. If I had closed that account, it then falls off at t=10, leaving 20, 18, 0 and 0, an average of 7.6.In the end, it seems like it's not worth it to close accounts. Keep the util, keep the history. If you're worried about fraud, call the companies and put a freeze on the account. If you really want to close accounts, close ones you've opened VERY recently, and if you're going to open anything new, do it asap. The longer you wait into the ten-year drop-off window, the more it may potentially hurt you later.
And this is a problem that seems to be occurring more and more frequently! It's pretty obvious that the CRAs' databases were not designed to handle the amount of activity that we put them through, especially those of us who use TrueCredit and other services to frequently check reports.
Another point in favor of not closing an account is that the 10 year removal after closing an account is not etched in stone. I closed a perfect pay history MBNA account in 2/2003. Sometime in 2004, the account history suddenly vaporized from all three reports. I am not able to get it back. I am positive that this is impacting my score dramatically, as its 8+ years is beyond my average age of 5-6 years old.
aw, crap, did I mess up the math? anyway...don't close accounts unless you plan to completely stop getting new accounts ;-)snookie wrote:But if that account fell off wouldn't your average age be 9.5? And the following year you'd have 21, 19, 1 and 1 which would raise you up to 10.5 so no real damage done right?
eaunspa's post has been moved to join a duplicate post over on General Credit Issues titled "Confused and Frustrated." Please, everyone, do NOT post duplicates. It just creates a mess, and the answers that you get become splintered.
Brammy wrote:Other than the utilization factor, the only problem I see is that once the trade line is purged from your reports, it can seriously reage your credit history if you had not opened other accounts within a short period of time.I have seen old closed accounts fall off due to age and significant score drops when a person had not applied for credit for a numebr of years between that old one and the next oldest one. My current file is only 9 years old (putting it into the class of a young file) and I have had credit for a little over twenty years, my old info has since fallen offf and there was a long period of time, maybe ten years where I did not app for any new credit. My current oldest accounts may start falling off in the next two years as they are installments, and those only show up on one bureau.
Message Edited by Brammy on 08-17-2007 09:45 AM
This is what I'm very worried about. I have my oldest account set to come off soon. Instead of my oldest account being opened 13 years it is set to fall off. It's coming off EQ in September. I have some accounts opened up the few years after that that will start falling off because they were installments or I closed the CC's after I paid them off. Then it wasn't untill 07 that I decided I needed credit again. Im gonna be ^$^$&!! . Ive already called & of course it is now another company & can't be reopened. I can apply for a new card! The others mostly they say they have no info on me! My oldest & average age is going to suck. I'm hoping maybe some new scoring will go into affect before my GAP of not using credit hits! I regret closing anything!! I won't do it again. my 1st new card after my Gap sucks, has an annual fee, its crap one, but I gotta see in a year this may be my oldest account. I dont want it falling off in 10 years , I'll leave it open for the next 30 years if I have too. I'm hoping I want have a problem with all 3 bureaus because some of those old accounts still say open , even though they arent, & arent reporting. Maybe they will stay forever!
Soorry forgot to quote BRAMMY.
This revelation is EXTREMELY helpful for when (due to the new credit legislation that was recently approved) the credit card companies start charging annual dues for us good credit users. I was worried about closing accounts that will get too expensive to keep open and the effect of those closures on the "aged" history calculation.
Now if FICO can just figure out how to address the issue of involuntary credit line decreases and the effect on overall utilization that I have no control over.