Wouldn't closing an account help my overall score?

[PCR20]

Wouldn’t closing my Discover account help my overall score?

I understand that closing accounts normally has a negative effect on your FICOs, but I think sometimes that’s not the case.

For example,

I have 6 open accounts:

CL          Bank          Years

15K        Citi               7.5

10K        BofA            9.1

7K          AmEx          7.6

8K          Chase          7.5

12K        USBank      5.8

2K          Discover     2.8

If I average this including Discover, I get 6.7 years and $9K per account.

If I closed the Discover card, I get 7.5 years and $10.4K average.

I really don’t get what’s up with Discover.

A few years back they mailed me a “Pre-Approved” letter (not Pre-Qualified), but didn’t state the amount of the pre-approval.

My FAKO’s were and still are in the 770+ range, so I assumed I’d get a decent CL and low Interest rate.

What they gave me was 23% and a CL of only $2K!

I called and asked why and they had no reason for this High Interest / Low CL setup.

Everytime I try to click the "Request Increase" button, it says no increase is availible to my account.

On BestCredit, I read this:

"FICO's scoring algorithm attempts to detect if a consumer is making poor credit decisions—that is, getting poor credit terms such as paying a higher interest rate. It's assumed, with some merit, that consumers who use general lenders are making bad credit decisions, and thus any lender that has “Banc” or “Finance” in its name will lower your credit score."

Even after almost 3 years, I'm thinking it's best to just close the dumb thing.

It may acually be hurting my score, being considered a "Low Value/Poor Decision" card. 

[Ysettle4]

You partially correct but only on the way AAoA is calculated. When FICO calculates overall credit availability, it looks at how much credit is available in total, not an average of available credit per account

So with your scenario, if you closed your discover account, yes, your AAoA would increase and you seem to be in no danger with total available credit because you'd only lose $2K out of $44K - provided that your utilization is very low.

[PCR20]

OK, that's what I am thinking also.

I cycle them every other month, carrying about 2% on a couple cards, pay them off then charge 2% on the next couple, mixing them up each time.

With fuel prices being what they are, I can do this with gas/oil changes alone.

It's my way of "Tending the Garden" to see if I can make it grow.

Still can't fantom what Discover is thinking.

I did once call Chase Bank and yell at them for closing my Washington Mutual Card while I was on vacation for no reason at all.

It was the only card I had with me and caused me many problems.

I filed a complaint with some Consumer Credit Protection Agency (along with many other WaMu customers) but nothing ever came of it.

Maybe there's a "Book of Secrets" that the CCC keep and share between themselves...

[Anonymous]

Fico counts closed accounts in aaoa for 10 years. So by closing it you would just reduce your overall CL.

[NRB525]

lol

Closing the Discover card won't really change your score. Keeping it open, however, will give you something to do. Search through the forums here and you will find many fellow frustrated Discoverers who can't figure out why they don't get an increase.

I'm on a personal "Discover CLI / APR quest" right now. They gave me a temporary $3k CLI in May, along with a BT offer, so I took them up on it, and am paying that down with a target date of May 2015 when the account turns back into a pumpkin and I get a $5k CL and 18% APR again. It'll be a zero balance then, and we'll see about a CLI and APR reduction at that time. I am optimistic that the credit gods will align, but I could also be delusional.

I've found them to be quite interested in my business over the last year, so that gives me hope. This is my second Discover card, opened in 2012 after they sent me a "We want you back" letter with a BT offer and $5k limit, which has not changed except for the temporary limit now in effect. My first Discover went from 2005 to 2009. I think I closed it back then because they wouldn't give me an APR reduction and were reducing my CL. It was $6,200 or so, generally flatlined then also.

I will say that my personal opinion of CLI is, it pays to run a lot of charges through the account to get their attention. In addition to the BT pay-down, I also ran $1,000 through this account in charges after they gave me a $100-back offer. If you have not allowed large amounts to report on the statement, relative to the CL, my theory is Discover is harsher than other banks in saying "You don't need a CLI".

Good luck!

[PCR20]

Fico counts closed accounts in aaoa for 10 years. So by closing it you would just reduce your overall CL.

OK, interesting to know.

That means I can include the two cards that Chase closed back in '08 in my AAoA, so my AAoA is really 6.9 with Discover, 7.4 without it.

If Store Cards are included, then I can also add a still open 29 YO Macy's card making it 9.3 with and 10.1 without.

Losing the $2k CL should have little to no effect, so I'm going to do it and see what how it changes after 60 days.

Maybe, just maybe, Discover will reveal the reason behind this strange card when I cancel it.

Thanks for the inputs.

[Ysettle4]

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@Anonymous wrote:

Fico counts closed accounts in aaoa for 10 years. So by closing it you would just reduce your overall CL.

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Not true. I closed an revolver account that was fairly new and it increased my AAoA. This is my personal experience with my credit reports. 

[HiLine]

My only bit of advice is: be skeptical about the 10 years figure. There is no guarantee on this, and many people have seen much shorter periods.

[Anonymous]

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@Ysettle4 wrote:

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@Anonymous wrote:

Fico counts closed accounts in aaoa for 10 years. So by closing it you would just reduce your overall CL.

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Not true. I closed an revolver account that was fairly new and it increased my AAoA. This is my personal experience with my credit reports. 

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Was this your aaoa on credit karma? They just count aaoa of open accounts.

[Anonymous]

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@HiLine wrote:
My only bit of advice is: be skeptical about the 10 years figure. There is no guarantee on this, and many people have seen much shorter periods.

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Usually that's how long closed accounts in good standing stay on your report. I believe the age counts the whole time it's there.