Originally Posted by
fikio
A key component of FICO scoring is the average account age. If you cancel any credit card, then the average account age will reflect that shorter history along with all of your other credit cards, and will continue to do so until 7 years after you canceled the card after which it will drop off and not be considered part of the average account age. Since persons have a variety of short-term factors that will affect the credit score, such as a car mortgage, student loans, etc, these are automatically decreasing the average account age, so to mitigate this 1 can hold credit cards for a long-time to increase the average.
I believe FICO looks at the amount of time since the account was opened, not the amount of time the account was open. Please correct me if this is wrong?
However, a closed account's credit line no longer factors in to the debt-to-credit-line ratio. If you have average balances of $5,000 (easy to do if you do pay off each month, but pay as many bills/living expenses on cards as possible) and had $50,000 in open credit, and then close a $20,000 card, your ratio would change 1:10 to 1:6.