Site Search
Social

Advertisement

Credit FAQ: Does Closing an Old Credit Card Hurt Your Credit Score?

by on January 31, 2012 · 17 comments

in Credit Cards, Credit FAQ

Having a strong credit score is like having the keys to the kingdom, since credit card bonuses are the quickest way to rack up tons of miles and points quickly (and without having to step foot on a plane). However you need to maintain a good credit score and the first part of doing that is understanding how credit score calculations work. Unfortunately, there are a lot of misconceptions and myths out there so this new Credit FAQ series that will clarify a lot of these points so you can get your credit score as high as possible.

Q: Part of a good credit score is having a high average age of accounts. Will closing a credit card account that I’ve had for a long time hurt the average age of accounts?”

A: No- at least not in the short term. It is true that the average age of accounts is something FICO takes into account when calculating your credit score, but an account will still stay on your credit report even after you close it. So as long as it was in good standing when it was closed, it will still help to increase the average age of accounts, just as if it were still open. Though it can still drop off at some point – but usually not after 7-10 years.

I’ve heard this several times, but this Bankrate interview with FICO rep Barry Paperno confirms it.

Note: closing credit cards can still have a negative impact on your credit score which I’ll get into in future posts, but they won’t negatively impact the average age of accounts.

Disclaimer: This content is not provided or commissioned by the credit card issuer. Opinions expressed here are author.s alone, not those of the credit card issuer, and have not been reviewed, approved or otherwise endorsed by the credit card issuer. This site may be compensated through the credit card issuer Affiliate Program.

Previous post:

Next post:

  • Curtis

    First thing I immediately notice in Paperno’s response is that he says a 20 year card stays on “as long as it’s on the report”. That is the caveat… because they DO drop off your report after (3-7 years?) if they are closed, as opposed to an open account that will not.

  • Bluto

    I dont think that is exactly what the article is saying. He says that if you close a card, it stays on your report in the short run, and so it doesn’t affect the average. However, he adds that once it is closed the issuer can remove it from the record at any time, typically within 10 years. when it is removed you no longer get credit for the account.

  • Guest

    WRONT! The account will disapear after 10 years if it is in “closed” status. You are partially correct in that it does not hurt your score right away, but in the end it does. My advice, if it is a no AF card and you have had it for a long time, keep it and use it every 6 months.

  • Bluecat

    I find that this is a confusing post. You wrote: “Will closing a credit card account that I’ve had for a long time hurt my credit score?

    A: No……. (but then you go to write)…..closing credit cards can still have a negative impact on your credit score

    Seems like you are saying no and yes at the same time.

  • Luke

    Pardon me if this sounds like a stickler summary, but…

    Q: “Will closing a credit card account that I’ve had for a long time hurt my credit score?”
    A: “No.”
    Note: “Closing credit cards can still have a negative impact on your credit score…”

    Perhaps a revision of the question is in order? Such as…

    “Q: Part of a good credit score is having a high average age of accounts. Will closing a credit card account that I’ve had for a long time hurt the average age of accounts?”

  • Anonymous

    I meant from an average age of accounts perspective it will not hurt your score- at least not in the short term. It is possible if you close a card that has a huge credit line that it can hurt your score because you have less available credit. But thats another aspect of credit scores.

  • Anonymous

    Agree it was worded weirdly- i updated to include your wording, which I like better. Thanks

  • Samuel

    I thought it was the average age of open accounts that is factored into your score, not the average age of all accounts…

  • Anonymous

    Nope- all accounts.

  • Samuel

    Nevermind, I think I’m wrong. Here’s an interesting article about the components of a FICO score.

  • Samuel
  • Guest

    This does not fit my experience. I made a rookie error and cancelled a long standing no-annual fee card earlier this year. (I know -duh!) It had a 20 year credit history. Prior to closing that card, I had a very high true FICO score (820) on a refinance report. It dropped to the mid-range 700s (750-775) before I began acquiring credit cards for miles bonuses. The only change I know of was my average age of credit dropping from 20+ years to about 2 1/2.

  • http://www.destination360.com Destination360 Travel Guides

    I’ve been using the points guy site from sometime and found it a great resource for traveling. Thanks! I’ve been opening and closing cards in under a year for two years now and still maintain 820+.

    One thing i have noticed is the offers are 50% of what they were a year ago.

  • runner

    I’m confused – how do you churn cards that you are not cancelling?

  • http://www.destination360.com Destination360 Travel Guides

    I cancel before a years up otherwise you get hit with annual fee. I do keep one set of cards that I’ve had for 10+ yrs open.

  • Shane

    Also posted in another forum, but thought I might get another perspective.

    I’m still learning the game and the in’s/out’s but I have a couple credit report questions…

    Is there a magic number to stay under in regards to “accounts in good standing”?

    Also, in regards to “Record of Requests for your Credit Report, is there a magic number there too???

    Mine are 43 and 7 (with 3 of the 7 dropping off by Aug of this year). Thanks for your time.

    Shane

  • Dread

    I have closed an old normal bank current account which did not have an overdraft or any form of credit or borrowing. I had it for 11 years. Please, will this have any negative or positive impact on my credit scoring? I would be glad for positive impact, if not then is it possible to contact the bank to reactivate the account? Could anyone advise me, pls?