Impacts of closng a TL

[basballguy]

I have a secured Cap One card.  I hate it.  I hate Cap One.  I hate their customer service....i'm just full of hate.

I have two questions:

1) Do you take an actual hit on your score for closing an account?  I know your available credit changes so your uti might change...this question is specific to the action of closing.

2) This plays off question 1.  Does FICO score Average Age of Accounts or Average Age of OPEN Accounts....or both?

[thom02099]

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@basballguy wrote:

I have a secured Cap One card.  I hate it.  I hate Cap One.  I hate their customer service....i'm just full of hate.

I have two questions:

1) Do you take an actual hit on your score for closing an account?  I know your available credit changes so your uti might change...this question is specific to the action of closing.

2) This plays off question 1.  Does FICO score Average Age of Accounts or Average Age of OPEN Accounts....or both?

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TL will remain on your report for 10 years (or more) and will reflect "closed by consumer".  Depending on your CL on that card, the impact on util could be minor, depending on your total credit picture, or major, if you have a limited credit history.  We'd need to know more about your total credit picture to adequately answer your question.

As an example of impact, I had a HSBC card (taken over by Cap 1), and closed that account.  The total credit limit on the card was $1550 at the time (my only toy limit), but since I had a bunch of other cards with CL all over $5K on each card, dropping my TOTAL CL by $1550 had no impact whatsoever. 

But again, YMMV depending on your total credit picture. 

[guiness56]

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@basballguy wrote:

I have a secured Cap One card.  I hate it.  I hate Cap One.  I hate their customer service....i'm just full of hate.

I have two questions:

1) Do you take an actual hit on your score for closing an account?  I know your available credit changes so your uti might change...this question is specific to the action of closing.

2) This plays off question 1.  Does FICO score Average Age of Accounts or Average Age of OPEN Accounts....or both?

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All OC accounts, opened, closed, good and bad factor into utilization.  So by closing the card your AAoA should be ok as it will still factor in.

The only thing that may take a hit would be utilization because the CL will no longer be factored in.  If you carry large balances it could cause your utilization to go up.  If you don't then I don't think you have anything to worry about.

Just don't close it with a balance, make sure it is 0.

The closed account will report for up to 10 years from the date closed.

[pizzadude]

+1. Also take a look at this thread:

http://ficoforums.myfico.com/t5/Credit-Cards/Closing-Credit-Cards/td-p/347190

[HiLine]

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@thom02099 wrote:

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@basballguy wrote:

I have a secured Cap One card.  I hate it.  I hate Cap One.  I hate their customer service....i'm just full of hate.

I have two questions:

1) Do you take an actual hit on your score for closing an account?  I know your available credit changes so your uti might change...this question is specific to the action of closing.

2) This plays off question 1.  Does FICO score Average Age of Accounts or Average Age of OPEN Accounts....or both?

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TL will remain on your report for 10 years (or more) 

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I believe it is up to 10 years.

[pizzadude]

It's a YMMV situation. Some accounts might stay past 10 yrs but usually they drop around that time.

[thom02099]

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@pizzadude wrote:
It's a YMMV situation. Some accounts might stay past 10 yrs but usually they drop around that time.

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+1. Generally 10 years for accounts to fall off...I have 3 positive TL that are older than 10 years, and one is still there...15 years later!  I ain't complaining...!

[guiness56]

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@thom02099 wrote:

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@pizzadude wrote:
It's a YMMV situation. Some accounts might stay past 10 yrs but usually they drop around that time.

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+1. Generally 10 years for accounts to fall off...I have 3 positive TL that are older than 10 years, and one is still there...15 years later!  I ain't complaining...!

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It is one of those debates.  The CRAs, who determine when a positive TL is removed, state up to 10 years.

I, like you, have had an account report for much longer.

[andydallas1]

Most of my cards now have a $10k+ (barely) credit limit, but I have an old discount tire/GE store card with a $400 credit limit,,would it be better to just close this so it doesn't show up, or get a credit line increase (I have another account with them with a $0 balance and a $8,500 credit limit)

andy

[pizzadude]

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@andydallas1 wrote:

Most of my cards now have a $10k+ (barely) credit limit, but I have an old discount tire/GE store card with a $400 credit limit,,would it be better to just close this so it doesn't show up, or get a credit line increase (I have another account with them with a $0 balance and a $8,500 credit limit)

andy

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Does the card have an AF ?  If not then I see no reason to close it, at least from a FICO scoring perspective.