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I have a secured CC thru my credit union. I got it a year ago, when I couldn't get any other credit cards. Since then, I've gotten a small Cap1 CC, which I'm happy about.
myfico tells me m oldest account is 8 years, 8 months and my average age is 3 years. I opened this CC in Dec 2010. It's 1k, which would help me a lot to pay down utilization. I will have a Citi card (closed by them but has a balance), a JCP card (open, 6.5 years old), and the cap1 card (opened in july 2011).
Would it be a bad idea to close the secured card? Would my average age be affected by closing it? I think it might actually make my average age older, which I know is a positive, but I am not sure.
WWYD? Wait until after I get approved for a mortgage and close on a house? Or do it now and hopefully get to that point quicker because I have an extra 1k to pay my utilization to 1%?
I think you are OK...for as long as it reports (and it will for the next 10 yrs or so, it'll continue to play a role in your AAoA and length of history. Your mix is fine. And the only other impact is to util. Now if you haven't closed it, I'd wait until after you close on the mortgage to close this CC. I say that because I'd leave well enough alone. I wasn't one to rock the credit boat while applying for a mortgage. Just pay it off and cut up the card.
That's probably wise. It will be paid off regardless, and I will really only need/want the $1k when I actually close on the house to buy furniture or what not.
I did find this, which seems to say that closed accounts still count in age, which makes sense: http://ficoforums.myfico.com/t5/Understanding-FICO-Scoring/Closing-Aged-Accounts-Yes-It-Is-Ok/td-p/1...
Sounds best to just pay it off and sit on it until I have my keys in my hand
I would not recommend closing it.
You now apparently have three open revolving accounts, one of which is a store card. Closing that card would drop you to only two open revolving, with one being a store card.
That is, in my opinion, not an optimal credit mix. Only one bank card.
FICO likes to see plural revolving credit, as it places high emphasis on your use of revolving credit. Preferably multiple bank cards.
With only two revolving lines of credit, it is harder to "smooth out" the utils between cards. Since FICO also scores on the % util of individ cards, one card being substantially higher than the other will hurt your individ util scoring.
FICO also scores on the percent of cards carrying a balance. With only two cards, that will always be either 0%, 50%, or 100%. With three cards, you have the 33% in the middle. If it sits in the sock drawer, it will always have zero balance.
You will also lose its CL in scoring your overall % util.
I dont see the advantage to closing it, unless it is carrying a yearly fee that you wish to eliminate.
The only reasons I've read to close credit cards are if they are costing you money. They can cost you money in monthly/anual fees.
OR, if you are unable to control your credit card purchases, then that would be a reason to close them, too.
otherwise, I don't see why you would want to.
Maybe you want the secured $ back?
-----> The only reasons I've read to close credit cards are if they are costing you money. They can cost you money in monthly/anual fees.
+1. Unless you have to pay to keep the account open, I wouldn't close it. After things settle down with your mortgage, perhaps you could consider asking them to unsecure the card as well ??
@pizzadude wrote:
-----> The only reasons I've read to close credit cards are if they are costing you money. They can cost you money in monthly/anual fees.
+1. Unless you have to pay to keep the account open, I wouldn't close it. After things settle down with your mortgage, perhaps you could consider asking them to unsecure the card as well ??
+1