Closing accounts that will make average age better not worse.

[Anonymous]

I was looking at my length of credit and it is one of the small factors that said that I needed to work on. So looked at my credit cards and how long I have had them open. The longest was over 17 years and varied from there. Over all I have about 19 credit card accounts and have over $120,000 in available credit with less than 1% used, never missed a payment and I am right at 800-810 in credit ratings. 

I looked at two cards that I opened in the last 5 years, one was the Paypal Mastercard with only a $1025 credit limit which was recently lowered by them from $6000 for most likley lack of use. I have had this card for under 3 years. The second is a Barclay Apple card that I have had for just under 4 years, $2000 credit limit. 

Doing the math canceling these cards would take my average age from 7 years to 8 years of average age. It would take my utilization down by less than 1%.  

Anyone have any advice? 

[KJinNC]

Closed accounts stay on your credit for 7 years if negative, 10 years if positive. In other words, it won't make a difference for account age. It will affect utilization (most likely for the worse, but maybe not enough to matter depending on details). Not saying keep them open, just that closing them won't serve the purpose you have in mind.

[imaximous]

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@Anonymous wrote:

I was looking at my length of credit and it is one of the small factors that said that I needed to work on. So looked at my credit cards and how long I have had them open. The longest was over 17 years and varied from there. Over all I have about 19 credit card accounts and have over $120,000 in available credit with less than 1% used, never missed a payment and I am right at 800-810 in credit ratings. 

I looked at two cards that I opened in the last 5 years, one was the Paypal Mastercard with only a $1025 credit limit which was recently lowered by them from $6000 for most likley lack of use. I have had this card for under 3 years. The second is a Barclay Apple card that I have had for just under 4 years, $2000 credit limit. 

Doing the math canceling these cards would take my average age from 7 years to 8 years of average age. It would take my utilization down by less than 1%.  

Anyone have any advice? 

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Closing those cards won't have the effect you're hoping for. They'll remain on your credit report as closed account and still count towards AAoA.

[Remedios]

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@KJinNC wrote:

Closed accounts stay on your credit for 7 years if negative, 10 years if positive. In other words, it won't make a difference for account age. It will affect utilization (most likely for the worse, but maybe not enough to matter depending on details). Not saying keep them open, just that closing them won't serve the purpose you have in mind.

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Nope. Closed account with negatives will also stay up to 10 years, but individual derogs will fall off no later than 7.5 years. Mostly it happens at 7 year mark.

[Anonymous]

That makes sense. Is it better to close an account or have it be closed by lack of use? 

[Anonymous]

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@imaximous wrote:

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Closing those cards won't have the effect you're hoping for. They'll remain on your credit report as closed account and still count towards AAoA.

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Right, for FICO is makes no difference till the cards fall of the reports, which can be 10 years.   Sites like Credit Karma use Average Age of Open Accounts, so it will make a difference there, but it's FICO that matters.

[KJinNC]

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@Anonymous wrote:

That makes sense. Is it better to close an account or have it be closed by lack of use? 

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Some people consider "closed at customer's request" to be a better comment than whatever they would say if they closed it due to inactivity, but as far as score calculations, it's the same.

[imaximous]

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@Anonymous wrote:

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@imaximous wrote:

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Closing those cards won't have the effect you're hoping for. They'll remain on your credit report as closed account and still count towards AAoA.

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Right, for FICO is makes no difference till the cards fall of the reports, which can be 10 years.   Sites like Credit Karma use Average Age of Open Accounts, so it will make a difference there, but it's FICO that matters.

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oh yes. Good old CK and all the other 'educational' credit reports 

[Anonymous]

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@KJinNC wrote:

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@Anonymous wrote:

That makes sense. Is it better to close an account or have it be closed by lack of use? 

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Some people consider "closed at customer's request" to be a better comment than whatever they would say if they closed it due to inactivity, but as far as score calculations, it's the same.

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Score wise yes. But what if for instance you CR were being viewed by physical eyes, and that person saw that every CC was closed by guaranter verses consumer? Because often times the closed reason is either inactive/non use or something less favorable than simply closed by consumer. 

[SouthJamaica]

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@Anonymous wrote:

I was looking at my length of credit and it is one of the small factors that said that I needed to work on. So looked at my credit cards and how long I have had them open. The longest was over 17 years and varied from there. Over all I have about 19 credit card accounts and have over $120,000 in available credit with less than 1% used, never missed a payment and I am right at 800-810 in credit ratings. 

I looked at two cards that I opened in the last 5 years, one was the Paypal Mastercard with only a $1025 credit limit which was recently lowered by them from $6000 for most likley lack of use. I have had this card for under 3 years. The second is a Barclay Apple card that I have had for just under 4 years, $2000 credit limit. 

Doing the math canceling these cards would take my average age from 7 years to 8 years of average age. It would take my utilization down by less than 1%.  

Anyone have any advice? 

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They stay on your reports, and continue to age. Closing them would do absolutely nothing to enhance your scores.