I keep seeing people close their oldest credit card after paying it off, and it's a huge mistake.

My friend in Phoenix paid off a card he'd had for 15 years and closed it last month. His score dropped 40 points because his average account age got cut in half. I've seen this happen with three different people now. They think a zero balance card is bad, but it's actually helping their history. The length of your credit history makes up 15% of your score. Has anyone found a good way to explain this to people without making them feel dumb?

3 comments

3 Comments

rivera.jake1mo ago

Saw my cousin do this with her first card from college. Tanked her score right before she was trying to lease a car. Now I just tell people to cut up the card but keep the account open.

richardh441mo ago

Wait, she closed her first credit card? That's brutal. That account history is like the foundation of your score. Closing it can slash your average account age overnight. I've seen scores drop 40 points from that move alone. Makes getting any loan way harder right when you need it.

logan6486d ago

I'm gonna push back on that "foundation of your score" line. Closing a first card isn't always a death sentence. I did it with my old store card from 10 years back and my score actually went up a few weeks later because my overall utilization got better. If that card had a low limit and you open a couple newer ones with higher limits, the average age hit isn't that bad. Plus keeping a card you don't use can backfire if you forget about it and miss a payment or the issuer closes it for inactivity anyway. Sometimes cutting ties clean is smarter than holding onto dead weight hoping it helps.