How Keeping Old Credit Accounts Open Affects Your Credit Score

Your credit score is influenced by several factors, and keeping older accounts open helps in the following ways:

1. Increases the Length of Your Credit History

  • The length of your credit history makes up 15% of your FICO score.

  • The older your credit accounts, the better it looks to lenders.

  • Closing old accounts can shorten your average credit age, which may lower your score.

2. Helps Maintain a Low Credit Utilization Ratio

  • Credit utilization (how much credit you’re using compared to your total limit) makes up 30% of your score.

  • Keeping an old account open retains its credit limit, which keeps your utilization lower.

  • Example: If you have a $10,000 total credit limit and owe $3,000, your utilization is 30%. Closing an account with a $5,000 limit would push your utilization to 60%, which could hurt your score.

3. Contributes to a Healthy Credit Mix

  • Your credit mix (different types of credit, like credit cards, loans, and mortgages) accounts for 10% of your score.

  • Keeping an old credit card open adds to your mix, showing lenders that you can manage different types of credit responsibly.

4. Improves Your Payment History

  • Payment history is the most important factor in your credit score, making up 35% of your total score.

  • If an old account has a long history of on-time payments, it benefits your score.

  • Closing it means that, over time, its positive impact will diminish on your report.

When Should You Consider Closing an Old Account?

While keeping accounts open is generally beneficial, there are a few cases where closing a credit card might make sense:

  • High Annual Fees: If you’re paying high fees for a card you don’t use, consider downgrading to a no-fee version instead of closing it.

  • Temptation to Overspend: If keeping the card open encourages unnecessary spending, it may be better to close it.

  • Fraud Risk: If the account has been compromised and you no longer use it, monitor it closely or close it if necessary.

Tips for Keeping Old Accounts Open Without Risk

✅ Use It Occasionally: Charge a small amount every few months and pay it off to keep the account active.
✅ Set Up Automatic Payments: A small recurring bill (like a subscription) can keep the account in good standing.
✅ Check for Downgrade Options: If the card has fees, ask your issuer about a no-fee alternative.