Closing Oldest CC?

[Harvey26]

Hey Fico Family,

My mother has an old CU card that is almost 9 years old. But the CU has went to crap. They are just becoming worse by the day. If we close this card how will it effect her credit. I might add that she is getting a mortgage within the next 6months. Scores are all above 750. AAOA 5Years and 4 months. 

[HeavenOhio]

It'd be better if she toughed it out until after the mortgage has closed. But if she can't, she can't. She definitely shouldn't plan on getting any replacement cards during that time, though.

[Anonymous]

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wrote:

Hey Fico Family,

My mother has an old CU card that is almost 9 years old. But the CU has went to crap. They are just becoming worse by the day. If we close this card how will it effect her credit. I might add that she is getting a mortgage within the next 6months. Scores are all above 750. AAOA 5Years and 4 months. 

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Generally speaking, you don't want to apply for any new credit at least 6 months prior to applying for the mortgage. I would also caution not closing that card until the mortgage closes. If its a 9 year old card, it could have an effect on her AAoA when the mortgage UW looks at the report. Its possible that the lower AAoA could result in a higher rate, costing thousands over the life of the mortgage. Wait it out.

[Harvey26]

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wrote:

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wrote:

Hey Fico Family,

My mother has an old CU card that is almost 9 years old. But the CU has went to crap. They are just becoming worse by the day. If we close this card how will it effect her credit. I might add that she is getting a mortgage within the next 6months. Scores are all above 750. AAOA 5Years and 4 months. 

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Generally speaking, you don't want to apply for any new credit at least 6 months prior to applying for the mortgage. I would also caution not closing that card until the mortgage closes. If its a 9 year old card, it could have an effect on her AAoA when the mortgage UW looks at the report. Its possible that the lower AAoA could result in a higher rate, costing thousands over the life of the mortgage. Wait it out.

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Ok will do.. Yeah she is also looking at replacing her CSP with the Citi DC. So we will hold off applying for anything until the mortgage is complete. 

[Anonymous]

Closing a card will have ZERO effect on the AAoA for 10 years, and the only way it would affect the FICO score is if it changes the UTIL. That said, I would still wait until after the mortgage closes before closing the card.

[Anonymous]

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wrote:

Closing a card will have ZERO effect on the AAoA for 10 years, and the only way it would affect the FICO score is if it changes the UTIL. That said, I would still wait until after the mortgage closes before closing the card.

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AGREED. CLOSING THE CARD WILL HAVE NO! EFFECT ON AAOA. IT JUST WOMT GROW THE AAOA ANYMORE. BUT IT WILL NOT DECREASE IT EITHER. POSITIVE TRADELINES STAY ON THE REPORT FOR 10 YEARS. NEGATIVES =7 YEARS. IF SHE NEEDS TO CLOSE THE CARD THEN CLOSE IT. BUT DO IT SOON. SO THAT EVERYTHING IS COOLED OFF OVER THE NEXT 6 MONTHS PRE MORTGAGE. DONT KNOW WHERE THE OTHER 2 POSTERS ABOVE GOT THEIR DP BUT IT WILL NOT AFFECT THE AAOA. IT WOULD LOOK EVEN BETTER IF SHE COULD HOLD OUT AS PREVIOISLY STATED. BUT IF SHE NEEDS TO CLOSE IT THEN SO BE IT. 

[Anonymous]

It's hard to know how to advise the OP because we don't know how many cards the mother has right now (counting the one she is thinking about closing).  If the mother has six, closing it will be no problem.  If the mother has two, closing it would be very bad for the upcoming mortgage.

As the other folks mention, closing it will have no effect on the mom's AAoA.  There are other ways, however, that the closure could affect a scoring model.  The mortgage models, for example, really like it when you have exactly one card showing a positive balance and several others all showing $0.  If the closure left her with only a couple cards, she would be unable to do that.

We also don't know, based on the initial post, how the closure would affect the mom's CC utilization.

[HeavenOhio]

The bottom line is that you don't want any unexpected surprises. The worst would be the highly unlikely event that the card didn't continue to report. As mentioned, there's also utilization and number/percentage of cards reporting balances. Even with several cards, depending on one's profile, percentage of cards reporting balances could possibly have an effect. My EQ score is especially sensitive to that.

The other piece of info we don't know is mom's mortgage scores. We don't know if she has a cushion to play with or not.

[Harvey26]

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wrote:

The bottom line is that you don't want any unexpected surprises. The worst would be the highly unlikely event that the card didn't continue to report. As mentioned, there's also utilization and number/percentage of cards reporting balances. Even with several cards, depending on one's profile, percentage of cards reporting balances could possibly have an effect. My EQ score is especially sensitive to that.

The other piece of info we don't know is mom's mortgage scores. We don't know if she has a cushion to play with or not.

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Utl is at 2%. And Mortgage Scores were all between 797 and 802 range. 

[SouthJamaica]

There is no certainty that once an account is closed, it will continue to be reported for 10 years. I had 5 closed accounts fall off of my EQ reports within a year of their being closed.