Credit Coach - The Old Timer vs. The Rookie 

There are many instances when a rookie is preferred to an old timer, but not on your credit report! If you have old credit card accounts, credit lines, or other revolving trades on your credit report it is recommended that you keep them open. While closed or open accounts both count in calculating your credit score, once an older account is closed it may drop off your credit report, and that may shorten the overall length of your credit history. When it comes to credit reports, an older credit history is better. 

More importantly, maxing out revolving accounts can hurt your score. Anytime you use more than 50% of your available credit on a revolving account such as a credit card, your score can start taking a hit. FICO scores, evaluate your "utilization" level both on individual accounts, as well as the total of all revolving accounts. Extra available credit is helpful in keeping your debt ratios down. 

What about the notion that your score will suffer if you have too much revolving credit available? The amount of available credit is not a stand-alone factor in calculating credit scores, so it shouldn't be of concern to consumers. FICO recommends leaving unused revolving accounts open. If you do want to close accounts, however, FICO recommends you close the rookie cards, the more recent retail cards and those with smaller credit limits. Don't close your oldest accounts. Keep the old timers, they will help you win the game! 

Tip: If you have not used an account in years, charge something small on it to be sure it remains active. Simply buy gas, lunch, or a birthday present for someone. Just make sure it is something inexpensive so you can easily pay the bill when it arrives. 

Advice from Stephen C. Leifer