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Author: IslandFoolin One star, 50 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 308360  
Subject: Effect of Closing Accounts in "Poor Standin Date: 10/9/2004 5:56 PM
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Good Day All,

As a bit of an update on "Me and My Parent's $40K Debt"... The pension loans came through, and so far $20K+ of credit card balances have been paid. Before this started I persuaded my dad to get copies of his credit report, which he did, and everything was in order.

Now I've read on this board before that closing accounts "in good standing" can have a negative effect on one's credit score. What about accounts that are in not-so-great standing, like my parent's? I warned them about the possible consequences of closing the accounts, but they wanted them "gone". There are a few accounts remaining, and these accounts are ones that have been around for 10+ years. Aside from obtaining their credit score pre and post account closure, is there any way to find out what effect closing these remaining "poor standing" accounts will have?

Thanks,

IslandFoolin
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Author: vkg Big gold star, 5000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 190944 of 308360
Subject: Re: Effect of Closing Accounts in "Poor Sta Date: 10/9/2004 6:17 PM
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Late payment notices will drop off sooner on an open account that a closed account. Since the accounts are in poor condition, their FICO will probably recover sooner if the cards are destroyed and the account is treated as non-existent rather than immediatly close the accounts.

Debra

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Author: Mary1122 Big red star, 1000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 190945 of 308360
Subject: Re: Effect of Closing Accounts in "Poor Sta Date: 10/9/2004 7:52 PM
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...$20K+ of credit card balances have been paid. ...closing accounts "in good standing" can have a negative effect on one's credit score. What about accounts that are in not-so-great standing?

For accounts that are paid in full, I think you should be able to close them "at customer's request," which has a neutral effect.

But even if it were not good for the credit score, don't let the tail wag the dog. The most important thing is to do whatever's effective in bringing spending down, debt down, and savings up, regardless of the credit score. So if they want the cards "gone," don't object!

IIRC, your parents do not plan to apply for a new mortgage in the immediate future, so they have plenty of time before then to worry about their FICO.

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