Closing the oldest Credit Cards *may* not impact the credit score

[pothi]

Sharing my experience with the community. YMMV.

I had only 2 credit cards until 5 months ago. No other loans. CIBIL was 796. Age of credit cards were 10 years and 7 years.

Made appr 10 inquiries since then and got two new credit cards. CiBIL dropped to 794, likely due to inquiries. Initially I got Amazon Pay ICICI card and then Airtel Axis CC.

Closed the oldest cards a couple of months ago one by one after getting the new cards.

Last month CIBIL score for three cards (two old cards and APay ICICI CC)… 795.

This month CIBIL score for just one card (APay ICICI CC)… 795

Airtel Axis CC is yet to be included in the CIBIL. I will update here after the inclusion.

Just sharing my experience. Please don’t blame me if you close your oldest CCs and see a drop in CIBIL score as the calculation of CIBIL score isn’t open to public, yet.

 

[SSV]

Until the CIBIL evaluation is made public, things can go wrong when closing a card (or any other loan). That said, CIBIL is all about the ability to repay the loan (credit card due). Closing a card doesn't make a person less trustworthy for repayments. So, one shouldn't worry about closing a card irrespective of its age.

You are right in general..
But I will explain why the oldest card closure counts..

Say you know two persons very well
Person1 - for 10 years
Person 2 - for 1 year

Who do you trust the most??

Likewise credit score and credit profile derives from various components. One among them is the length of credit history.

again another example:

A person has several cards of which
1) his oldest card is 10 years old
2) second oldest card is 1 year old.
In this case if he/she closes the oldest card then there will be impact on the score

where as if the second oldest card is 9 years old then almost no impact on the score.

Hope this clarified the importance of the age of credit profile

 

[Vasuki]

You are right in general..
But I will explain why the oldest card closure counts..

Say you know two persons very well
Person1 - for 10 years
Person 2 - for 1 years

Who do you trust the most??

Likewise credit score and credit profile derives from various components. One among them is the length of credit history.

again another example:

A person has several cards of which
1) his oldest card is 10 years old
2) second oldest cards is 1 year old.
In this case if he/she clsoes the oldest card then there will be impact on the the score

where as if the second oldest card is 9 years old then almost no impact on the score.

Hope this clarified the importance of the age of credit profile

But closing loan
.has no impact

 

[SSV]

But closing loan
.has no impact

Rules are same for any type of credit account in this case

 

[FinoGuy]

Coral is my oldest card may 2022
Mmt is my second oldest card July 2022

I am thinking I’ll close the coral cc since it’s of no use to me. What do you guys suggest? It’s my oldest card so not sure if it’ll impact my Cibil negatively

Are you really serious? I mean OP went from 10yrs credit age to 0. You're asking if your credit score drop if your credit age reduces from 1y7m to 1y6m...1 month difference! Timepass

 

[FinoGuy]

You are right in general..
But I will explain why the oldest card closure counts..

Say you know two persons very well
Person1 - for 10 years
Person 2 - for 1 year

Who do you trust the most??

Likewise credit score and credit profile derives from various components. One among them is the length of credit history.

again another example:

A person has several cards of which
1) his oldest card is 10 years old
2) second oldest card is 1 year old.
In this case if he/she closes the oldest card then there will be impact on the score

where as if the second oldest card is 9 years old then almost no impact on the score.

Hope this clarified the importance of the age of credit profile

Fixing your example to op's story will mean more appropriate to say person 1 died /killed 🔫 (card closed 🔫 ), but still memory will remain that he's more trustable. So technically cibil has long term memory loss 😂

 

[simplegarv]

You'll notice a change in score in next 1 or 2 months, as your credit age went from 10 years to 0.

Also, as your utilisation will get changed now, you'll see your score change accordingly. For the best analysis, get a CIBIL subscription and check for yourself.

If you are really into credit score, pay all your bills before generation and let it generate to 0. Then your score will get increased super fast.

Also another major factor I noticed from personal experience is, if you're letting your bills generate normally without pre-paying them, you need to keep utilisation below 30% on each account, contrary to popular belief that overall utilisation should be below 10%. As my overall utilisation was 6% but utilisation on a single card account was ~70%, my score dropped significantly.

No, My mother's first card was HDFC Easy EMI which we had to close and we didn't have any other choice left but my credit age is still of 3 years and 11 as the card was issued in Mar-2020.

Note: this card was closed in 2022

 

[Deveshm18]

Setting your example to op's story will mean more appropriate to say person 1 died /killed (card closed), but still memory will remain that he's more trustable

Leaving aside the jokes, do you believe that having excess credit limit makes you less likely to get more credit cards/credit limit increases. Just wondering if I should close the account since it seems like it’s present as a second ICICI account in my Cibil report rather than being consolidated under 1 account.

 

[FinoGuy]

Leaving aside the jokes, do you believe that having excess credit limit makes you less likely to get more credit cards/credit limit increases. Just wondering if I should close the account since it seems like it’s present as a second ICICI account in my Cibil report rather than being consolidated under 1 account.

ABSOLUTELY NO.. It seems the agent just faked it to mask his inability to get u higher CL. Infact, more CL in other bank means those banks trust you with that much high limit. Indicating more trustworthiness of customer & hence the limit should be high.. Moreover, you can always take a low limit card (if you badly want that card) then send mail to cc desk to match the limit of your other bank cc. They'll happily match upto 90%..you can reconfirm the same with more experienced TFians like @bhavyegoel @S S V @Wealth is my birth right! @Batmanbaba.
(Also pls do tag me if you get contrary opinion from any senior member )

 

[pothi]

Those who want to understand how CIBIL score works, I highly recommend taking the quiz in Google Pay app. I take this quiz once a month (when my score is updated). It's all about logic. You don't need to do any math to understand how the CIBIL score works. Here's the screenshot from my latest quiz question...

 

[techt]

I was talking to my HDFC RM today and he let me know that the reason I keep receiving low limit from HDFC may be because my total credit limit from other banks is too high. Not sure how true this statement is but it led me to think I should close some CCs I don’t use.

I currently hold 3 ICICI CCs
Icici mmt and Icici sapphiro share one limit
Icici hpcl coral has an individual limit

Coral is my oldest card may 2022
Mmt is my second oldest card July 2022

I am thinking I’ll close the coral cc since it’s of no use to me. What do you guys suggest? It’s my oldest card so not sure if it’ll impact my Cibil negatively

Lol 😂 he might be wanting you to close other bank ccs in favor hdfc. What a strategy.

 

[techt]

In gpay app, there is a simulator. It shows what is the impact on cibil on closing etc. It does show that no impact for a 10 year cc if closed and my next cc is 3 year old.

 

[iamdhamo]

Sharing my experience with the community. YMMV.

I had only 2 credit cards until 5 months ago. No other loans. CIBIL was 796. Age of credit cards were 10 years and 7 years.

Made appr 10 inquiries since then and got two new credit cards. CiBIL dropped to 794, likely due to inquiries. Initially I got Amazon Pay ICICI card and then Airtel Axis CC.

Closed the oldest cards a couple of months ago one by one after getting the new cards.

Last month CIBIL score for three cards (two old cards and APay ICICI CC)… 795.

This month CIBIL score for just one card (APay ICICI CC)… 795

Airtel Axis CC is yet to be included in the CIBIL. I will update here after the inclusion.

Just sharing my experience. Please don’t blame me if you close your oldest CCs and see a drop in CIBIL score as the calculation of CIBIL score isn’t open to public, yet.

It takes 3 months na to reflect

 

[pothi]

The score is dropped by 8 points after the inclusion of Airtel Axis CC. (Credit) Usage is increased by 3%, though.

My score increased by 7 points this month with only one change... the credit limit on Amazon Pay ICICI CC was doubled since last month.

Basically, only one point drop since the closure of oldest cards.

 

[Gaara]

If anyone is looking for an Excel sheet to calculate their average credit age and individual card age, I can send it to you. However, I’m not sure how to post an Excel file here. 📊📄

 

[D₹V]

If anyone is looking for an Excel sheet to calculate their average credit age and individual card age, I can send it to you. However, I’m not sure how to post an Excel file here. 📊📄

Use this button

 

[Gaara]

🙁

 

[Gaara]

You can review and update your card details based on the information in your CIBIL reports. When entering the date of card opening, ensure that the date format in your spreadsheet matches your preference—sometimes it switches between DD/MM/YYYY and MM/DD/YYYY.

 

[asahi]

I’m an epitome of Cc closures, i closed nearly 15+ credit Cards & 8 BNPL LOANS in the span of 2 years including my oldest ones, my credit score never dropped because of those reasons. In my experience credit score only dropped when there are multiple inquiries done by banks every month(of course it only happens because you’re applying for every card out there, every month). Also Credit score drops drastically if we miss on time payments regularly(my friend seen credit score reaching below 400 coz he forgot to pay balance on CLOSED CC FOR YEARS). In my case i’ve 100% on time payments to this date. So this played a vital role in keeping a good score. My credit score currently is 778 & it never dropped below 772. So Go ahead close whatever card you want irrespective of how old it was. Also Opening of so many cards in a short span also will impact, utilisation of more than 30% limit also impacts, but not Cc closures

 

[pothi]

You can review and update your card details based on the information in your CIBIL reports. When entering the date of card opening, ensure that the date format in your spreadsheet matches your preference—sometimes it switches between DD/MM/YYYY and MM/DD/YYYY.

Well done. 💯 I recommend creating a new thread to share this to get more exposure. You deserve a much larger audience.

 

[moneyMaker]

If you are really into credit score, pay all your bills before generation and let it generate to 0. Then your score will get increased super fast.

The real churning.