Comments on: Why You Shouldn’t Delete Old Accounts from Your Credit Report http://www.zipdebt.com/blog/credit-old-accounts Straight Talk by Charles Phelan on Debt Settlement & Other Debt Reduction Strategies Thu, 04 Dec 2008 21:04:24 +0000 http://wordpress.org/?v=2.6.1 By: Charles http://www.zipdebt.com/blog/credit-old-accounts#comment-15086 Charles Thu, 11 Oct 2007 19:55:07 +0000 http://zipdebt.com/blog/?p=13#comment-15086 In response to the above comment, I need to point out that Curly is simply mistaken here. It doesn't work that way at all. My own credit score is above 800, and I have numerous old inactive accounts. They still show as open even though I have not used them in many years, and they are all at zero balance. I have never been turned down for a loan or denied credit because of those accounts, and I'm sure most people would agree that an 800 FICO score is pretty good! What needs to be considered here is that open credit is NOT considered as a stand-alone factor by the credit bureaus. However, average length of credit history can be reduced by closing old accounts, which LOWERS the score. Also, closing out old zero-balance accounts INCREASES the debt-to-credit utilization ratio, which in turn will LOWER the credit score. Anyway, readers don't need to take my word for it. Here is a link to an article by consumer credit expert, Gerri Detweiler, which confirms what I'm saying here: http://www.stretcher.com/stories/04/04aug23b.cfm In response to the above comment, I need to point out that
Curly is simply mistaken here. It doesn’t work that way at all. My own
credit score is above 800, and I have numerous old inactive accounts. They
still show as open even though I have not used them in many years, and they
are all at zero balance. I have never been turned down for a loan or denied
credit because of those accounts, and I’m sure most people would agree that
an 800 FICO score is pretty good! What needs to be considered here is that
open credit is NOT considered as a stand-alone factor by the credit bureaus.
However, average length of credit history can be reduced by closing old
accounts, which LOWERS the score. Also, closing out old zero-balance accounts
INCREASES the debt-to-credit utilization ratio, which in turn will LOWER
the credit score. Anyway, readers don’t need to take my word for it. Here
is a link to an article by consumer credit expert, Gerri Detweiler, which
confirms what I’m saying here:

http://www.stretcher.com/stories/04/04aug23b.cfm

]]> By: curly http://www.zipdebt.com/blog/credit-old-accounts#comment-15085 curly Thu, 11 Oct 2007 10:40:56 +0000 http://zipdebt.com/blog/?p=13#comment-15085 Large open credit accounts with zero balance are handled by the credit reporting agency's as a debt when considering your credit score. Even though they are not being used. To much credit can also hurt as does not paying bills on time. The logic behind the thinknig goes like this, you have two credit cards, each with 20,000 open lines of credit with zero balances. Means you could at any point in time go from zero to 40,000 in debt in one day. Making you a risk to lenders if you go above your head in what you can afford to borrow. So all open accounts with zero balances can be treated like a debt even though you have no balance. Large open credit accounts with zero balance are handled by the credit reporting agency’s as a debt when considering your credit score. Even though they are not being used. To much credit can also hurt as does not paying bills on time. The logic behind the thinknig goes like this, you have two credit cards, each with 20,000 open lines of credit with zero balances. Means you could at any point in time go from zero to 40,000 in debt in one day. Making you a risk to lenders if you go above your head in what you can afford to borrow. So all open accounts with zero balances can be treated like a debt even though you have no balance.

]]> By: Charles http://www.zipdebt.com/blog/credit-old-accounts#comment-15074 Charles Mon, 24 Sep 2007 18:01:01 +0000 http://zipdebt.com/blog/?p=13#comment-15074 In response to Heather's question: Yes, this is a myth. Your credit score is actually improved by having open accounts with a zero balance, not hurt. The reason is because of the debt-to-credit ratio as discussed in the original blog post above. Open credit lowers your ratio of debt-to-credit, which improves your score. In response to Heather’s question: Yes, this is a myth. Your credit
score is actually improved by having open accounts with a zero
balance, not hurt. The reason is because of the debt-to-credit ratio
as discussed in the original blog post above. Open credit lowers your
ratio of debt-to-credit, which improves your score.

]]> By: Heather http://www.zipdebt.com/blog/credit-old-accounts#comment-15071 Heather Sun, 23 Sep 2007 18:16:07 +0000 http://zipdebt.com/blog/?p=13#comment-15071 I have heard that open accounts with a zero balance actually can hurt your credit score. Is this a myth?? I have heard that open accounts with a zero balance
actually can hurt your credit score. Is this a myth??

]]> By: Charles http://www.zipdebt.com/blog/credit-old-accounts#comment-113 Charles Thu, 20 Jul 2006 15:10:40 +0000 http://zipdebt.com/blog/?p=13#comment-113 "At what point do you have too much available credit, and it would be better to close a few accounts-(newer ones)? Is there a ratio to income?" Income data does not appear directly on your credit report, so there isn't a ratio of available credit to income. Credit score is primarily just a reflection of your payment history. The longer the history, the better. The ratio that matters is debt to available credit. This is why in general it does not make sense to close out any accounts with a positive payment history. That much said, however, it's possible that you could be denied a mortgage if the risk analysis showed too much available credit against income. But that is something that could be easily handled as part of the mortgage underwriting process. I see no need to close out positive accounts unless a specific financing situation requires it. “At what point do you have too much available credit, and it would be better
to close a few accounts-(newer ones)? Is there a ratio to income?”

Income data does not appear directly on your credit report,
so there isn’t a ratio of available credit to income. Credit
score is primarily just a reflection of your payment history. The
longer the history, the better. The ratio that matters is debt to
available credit. This is why in general it does not make sense
to close out any accounts with a positive payment history. That
much said, however, it’s possible that you could be denied a
mortgage if the risk analysis showed too much available credit
against income. But that is something that could be easily handled
as part of the mortgage underwriting process. I see no need to close
out positive accounts unless a specific financing situation requires
it.

]]> By: Sue http://www.zipdebt.com/blog/credit-old-accounts#comment-109 Sue Thu, 20 Jul 2006 04:53:39 +0000 http://zipdebt.com/blog/?p=13#comment-109 Good to know. Thanks. At what point do you have too much available credit, and it would be better to close a few accounts-(newer ones)? Is there a ratio to income? Good to know. Thanks.
At what point do you have too much available credit, and it would be better
to close a few accounts-(newer ones)? Is there a ratio to income?

]]> By: Selina http://www.zipdebt.com/blog/credit-old-accounts#comment-12 Selina Thu, 29 Jun 2006 16:26:57 +0000 http://zipdebt.com/blog/?p=13#comment-12 This was very helpful. I had considered removing inactive accounts. I do not want to lowere my score. Thanks This was very helpful. I had considered removing inactive accounts.
I do not want to lowere my score.

Thanks

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