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There are times when information is disseminated which is just simply not true. CNBC’s Alexandria White’s article that closing your oldest credit card will not have a substantive impact to your FICO Scores is just not true. 


How closing a credit card affects your credit score

By Alexandria White (CNBC)

CNBC spoke to Rod Griffin, senior director of consumer education and advocacy at Experian, to understand whether closing your oldest credit card, or any card at all, is a good idea.

Closing a credit card may not have the severe negative effect you think it will. “While your scores may decrease initially after closing a credit card, they typically rebound in a few months if you continue to make your payments on time,” Griffin says.

The primary reason your score may decrease is through losing a credit limit and increasing your utilization rate. “When you close a credit card account, you lose the available credit limit on that account...this makes your overall credit utilization rate, or the percentage of your available credit you’re using, increase,” Griffin says.

An increased utilization rate is a sign of risk to lenders since it represents you’re using a large amount of your total available credit.

If you want to gauge how closing a credit card may affect your credit score, consider online score simulators, such as CreditWise from Capital One. For instance, CreditWise’s simulator allows you to see how taking certain actions, such as closing a credit card or paying off a balance, might impact your credit score.

When I simulated how closing my oldest credit card would affect my credit score, it only showed a one point decrease from 808 to 807. Keep in mind, the exact effect on your credit score can vary.


Here’s the Problem


First, she takes her score from Capital One – which is the Vantage Score. This score is not used by lenders. She uses it as an example. 

Second, she uses its tool to see how much her score will drop if she closes her longest credit card account. This tool is a Vantage Score tool. Again, it is not used by any lenders. 


It is not an accurate statement!!


Her score dropped by one point. She indicates that there is no real impact to your FICO scores if you close your oldest account. 




What’s the REAL TRUTH here?


During a lunchtime class at Brigham Young University several years ago, a woman told her story of finding out the true problem of closing your oldest credit card account. Her daughter convinced her that if she is not using her any credit card, that she should close all of them. She closed a credit card that was about 15 years old, which was her oldest account. Her FICO scores dropped over 50 points. 


Time and again, millions of consumers have closed aged credit cards that have really helped increase their FICO scores. They have seen drops to their FICO scores from 25 to about 60 FICO score points. Once you close a credit card, you cannot get it opened. 


Think about Teenagers


If this reporter’s assertion is correct, those first establishing their credit file such as teenagers would be able to have 800-level FICO scores once the first loan or credit card account is established. They never do. Their FICO scores start out around 675 to 690 once their first credit card or two hit their credit report (after a few months of history). What is the sole reason why they do not start out with higher FICO scores? They do not have depth – or longer established credit cards and other open accounts in their credit file. 


This scenario alone debunks this reporter’s assertion that closing your longest opened credit card accounts will not harm your FICO scores. This action in most every case will drop your FICO scores. 


What Should You Do?


Locate your active oldest credit card in your credit report.


  1. Keep it open. 

  1. You need to periodically use the account usually once or twice a year. Borrow on it and pay it off within a day. That is all you need to do. 


This is critical to know!


The difference between a 740 FICO score and an 800 FICO score is how long your open accounts have been opened. 


To read the entire (inaccurate) article by Alexandria White at CNBC, click the following:

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