I need to know if it's bad to close an old credit card account. I've heard two conflicting answers to this question. One: Closing an old account hurts your credit, because it makes it look like you haven't had credit very long. Two: It doesn't matter if you close an old account, because the closed account will still show up on your credit report and show you have an old line of credit. So which is true? A second question, for those kind enough to take the time to read all of this: Is it the AVERAGE age of your accounts that is calculated into your credit score, or the age of the OLDEST account? Again, I've heard conflicting answers. And the answer to this question has real implications: if it's the AVERAGE, then closing an old account could hurt, whereas if all they look at is how old your oldest account is, closing an account wouldn't matter at all as long as you have one older one. And a third issue (again thank you for bearing with me). I didn't actually close my old account -- I applied for a Chase card, and they gave me one, but they went ahead and closed my First USA account, which I never use anymore. The only problem is, that First USA account was my second-oldest, from 1995 I believe. Is there any way my new Chase account will show that it dates back to 1995, sort of like a "conversion" rather than a new account? If not, will Chase do that for me if I ask them? My apologies if these issues have been addressed before. Thank you in advance for any input you may have.
I am not sure whether FICO distinguishes between an open account, and a closed account, if they are the same age, but if the account has a credit limit that is a significant part of your available credit, then closing it may significantly decrease your debt to available credit ratio, which will decrease your score. Don't use a significant portion of your available credit. Don't depend on too few banks for credit. Remember, two of them could merge tomorrow, and then decide they want higher rates from you. Keep your options open.
