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myscreennamegoeshere48

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Credit score dropped from closing an old account?
In 2010 my credit score was 798. I applied for a mortgage and was approved. After I got the mortgage, I cancelled several of my old credit cards and bank accounts (that I wasn't using anyway). Now it is 2013 and my credit score dropped to 747. I understand that length of active credit is one of the criteria, and that dropped to three years, but a 50 point drop seems drastic for doing the responsable thing. Does anyone have any ideas as to what happened. Is this normal?

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Why close old accounts?

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You are right. Closing old cards decreased the lenght of active credit and hence the score dropped. In general, if your active credit length is less than 5 years, you are considered relatively 'new' to credit, which is a big deal for the score.

Another factor that is indirectly related to closing accounts is it decreases your overall available credit. Utilization ratio is another big factor in calculating your score, and these two things combined are making the score drop by 50 points. I totally agree with you that you did a responsible thing, but the credit system is designed to calculate the score that way, what to do? There are inherent drawbacks in the system re: what it counts and what it ignores while calculating your score but there is nothing we can do than to follow them.

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Thanks

Really, my ultimate goal is to have no credit score.  So far my wife and I have paid off over $100k on our house and should be debt free by early 2015.  I'll probably keep my credit card just in case I need to rent a car or stay at a hotel.  Thanks again!

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AADeo

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Very welcome!

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