Good Credit Score Not Good Enough Anymore

Amstel said:
Yes. from your links. you read them before you posted them right?

[IG]http://img32.imageshack.us/img32/3439/clipboard01mc.jpg[/IMG]


[IG]http://img697.imageshack.us/img697/8332/clipboard01lt.jpg[/IMG]
Click to expand...

"There is never any good reason to close an account."

That says nothing about it affecting you.

because credit is my fulltime job, let me explain how this works.

Older Accounts.

Closing older accounts can negatively effect your score because it can significantly reduce the 'average age' of all of your accounts combined. When your 'average age' of accounts goes down, so does your score.
Click to expand...

You've just repeated what I said. Thanks. However, we're both wrong. Read my second link, you did read it right? Your history remains, so closing any account has zero effect.

Closing any accounts is detrimental to your score as well because another significant part of your score is the proportion of credit you have available to you.
Click to expand...

Not always. If you carry no balance, it doesn't matter. At all.

if you have one account with a $1000 limit with a $1000 balance you have 0% available. this is bad for your score.

if you have the above account, and another newer account open with a $4000 limit and $750 balance, your combined limit is $5000, and your combined availability is 65%. This is good because you have a significant percentage of your credit lines still available for use.
Click to expand...

Wrong again. Per card utilization also plays a part. So having a single card maxed out can negatively impact your credit.

Closing the $4000 account because they were going to raise your interest will crush your score as much as 100 points because you go from having credit available to you, to having none available.
Click to expand...

Then pay the higher rate. That sounds like a dumb idea to me though. I'd close the account, lock in the rate, and pay it off. Guess what happens when your utilization goes back down? 30-60 days later, you've got good credit again. Not the same as paying the higher rate, getting behind, and missing payments. Those stay on your credit longer than 30-60 days.
 
Originally Posted by Amstel View Post
Yes. from your links. you read them before you posted them right?

clipboard01mc.jpg



clipboard01lt.jpg

fly said:
"There is never any good reason to close an account."

That says nothing about it affecting you.
Click to expand...
Click to expand...

you said closing accounts were fine, wouldn't effect you, and provided a link to bolster your point. Your link disproved your point as I further posted in my response. I don't expect you to understand. You seem satisfied to deny reality.

fly said:
Amstel said:
because credit is my fulltime job, let me explain how this works.

Older Accounts.

Closing older accounts can negatively effect your score because it can significantly reduce the 'average age' of all of your accounts combined. When your 'average age' of accounts goes down, so does your score.
Click to expand...
You've just repeated what I said. Thanks. However, we're both wrong. Read my second link, you did read it right? Your history remains, so closing any account has zero effect.
Click to expand...
No again, you're wrong. yes, with a closed account you have history. Congrats. You had it before when the account was open. The kicker, which you seem to deny, is that with a closed account you have no (read: zero) credit available, zero credit limit. did you read the part in your link that says "Proportion available" effects your score? read it again. I even provided a simplistic, real world example for you. (there's more than one example in this thread) Lower score, and higher utilization ratio negatively impacts current accounts and your ability to secure better financing in the future. ie: car, home, home equity loan to pay of other debt. again, I don't expect you to get this.
Fly said:
Amstel said:
Closing any accounts is detrimental to your score as well because another significant part of your score is the proportion of credit you have available to you.
Click to expand...
Not always. If you carry no balance, it doesn't matter. At all.
Click to expand...
It matters when you go to secure financing in the future and your score sucks. THAT is when it matters. Hi, Mrs. Wonderful with your no debt, no credit, no nothing application. Guess What? I have nothing to base your recent payment history on, and your score sucks. Sorry. You're denied. . .

Look at the pie chart you provided. It doesn't say closed accounts are full of wonder and joy and good news. There's a reason it doesn't say that. Just like there's a reason the link you provided says:
Question: So, is there ever any reason to close a credit card, from a credit score perspective?
Answer: Not from a scoring perspective, no. There really is never any good reason to close an account.
Click to expand...

Fly said:
Amstel said:
if you have one account with a $1000 limit with a $1000 balance you have 0% available. this is bad for your score.

if you have the above account, and another newer account open with a $4000 limit and $750 balance, your combined limit is $5000, and your combined availability is 65%. This is good because you have a significant percentage of your credit lines still available for use.
Click to expand...
Wrong again. Per card utilization also plays a part. So having a single card maxed out can negatively impact your credit.
Click to expand...
no it doesn't. it's a combined average. quit making shit up.


Fly said:
Amstel said:
Closing the $4000 account because they were going to raise your interest will crush your score as much as 100 points because you go from having credit available to you, to having none available.
Click to expand...
Then pay the higher rate. That sounds like a dumb idea to me though.
Click to expand...
It is a dumb idea.


Fly said:
I'd close the account, lock in the rate, and pay it off. Guess what happens when your utilization goes back down? 30-60 days later, you've got good credit again.
Click to expand...
Wrong. Even in my example, I show you that it kills your utilization immediately and leaves your other credit vulnerable to rate hikes for the very reason that your utilization has spiked when you closed other accounts.

But your big blunder is not thinking ahead. your simplistic mentality will leave you vulnerable down the road when you need or want to finance.

0% option on that car? Sorry, your credit sucks so you can't leave that $30,000 in an interest bearing account & increase your cashflow.

Take out a home equity loan for the car so you can write off the pmnts? Sorry, your credit sucks. Why don't you pour some more $$ into that jalopy & come back when your credit is better.

:case:
 
Last edited:
We have reached the SUPARQUOTE section of the argument, where I just scroll pass and pray for funny banter ahead.
 
Im glad I have no real credit. I applied for a bunch of CC a while back but got refused, I'm so glad I was. I wouldda maxxed those things out in a week in the mood I was in. I could pay them back but I prefer my philosophy of 'if you can't afford it today, you can't have it today'.

Obviously doesn't really apply to houses but I'm not looking to buy for the next few years.
 
fly said:
OMG UR SIMPLISTIC MENTALITY WILL DCRUSH YOU
Click to expand...

I know nothing about credit or finances, so I'll revert to doing what you advise. Seems to work for you. *shrug*

It's funny though cos my sister in law is a really high paid accountant and earns shit loads of money, yet her and my brother are ALWAYS in loads of debt, almost lost their house last year, brought a brand new car this year. They're completely stupid.
 
You must log in or register to reply here.
Top Bottom
Back