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  1. #1
    Registered User New Member

    Credit scores: credit history/length of CLOSED credit accounts vs OPEN ones

    Why is it that the length of credit history for open accounts is so much more valuable than closed accounts? Is it because you have access to more credit and that makes other lenders less nervous?

    In that case, shouldn't they just look at your overall access to credit (credit available minus credit used) along with DTI ratios, etc?

    I know if you have a long standing credit card in good shape, that you shouldn't necessarily close it as this may lower your score. I just don't understand why this is the method of evaluation. It opens up the possibility of fraud and poor use of credit. I don't like the idea of having open lines of credit that I don't use and have no need for. Why not just consider the length of all accounts, closed and open, and the standing of those accounts when scoring? This seems like a perverse method of evaluation.

    Anyone who can break this down (in terms of reasoning), I'd love to hear about it. I'm not challenging "the way it is", but more in principle, why it is that way.


  2. Credit scores: credit history/length of CLOSED credit accounts vs OPEN ones
  3. #2
    Surprised no one has responded to this yet - I completely agree, it doesn't make a whole lot of sense. Although the closed accounts do still carry weight for a few years after you close them, you make a really great point - leaving accounts can potentially increase the risk of identity theft. After two years of trying to improve my credit I've found that very little that the credit bureaus do actually makes sense. The dispute process is also still incredible convoluted especially now with the internet which should make things much easier - but it still takes forever and is incredible frustrating.. especially if you aren't persistant.
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