Experian Report Alert Question

Kimberley

Can anyone tell me what it means by the age of your accounts have decreased? I got an alert saying lenders may see you as a high risk as the age of your credit accounts decrease.

VictimOfImpersonation

Kimberley wrote: »

Can anyone tell me what it means by the age of your accounts have decreased? I got an alert saying lenders may see you as a high risk as the age of your credit accounts decrease.

That will be the average length of time that you have held your credit accounts. The longer you have held credit without going wrong, and the higher the credit limits you have held without using them is seen by some to be a measure of the trust existing providers have in you.

The fact that the CRA is mentioning such a concept in an alert might well be an argument for retaining dormant credit accounts in some circumstances where no new credit is being sought for a period, rather than closing them as has often been advised in these forums.

If you keep closing accounts and opening fresh ones, then that will show as "age of your credit accounts is decreased".

sundevil_rachael

VictimOfImpersonation wrote: »

That will be the average length of time that you have held your credit accounts. The longer you have held credit without going wrong, and the higher the credit limits you have held without using them is seen by some to be a measure of the trust existing providers have in you.

The fact that the CRA is mentioning such a concept in an alert might well be an argument for retaining dormant credit accounts in some circumstances where no new credit is being sought for a period, rather than closing them as has often been advised in these forums.

If you keep closing accounts and opening fresh ones, then that will show as "age of your credit accounts is decreased".

I would agree with this whole heartidly and I have learnt this the hard way. I had a Bank of Scotland Mastercard for 12 years with a £15,000 limit with nothing on it after I transferred the £2000 balance.

Advice has always been to close accounts your not using, which I did. Within 6 months my other card reduced my limit, a card I have had for 14 years and something they have never done. I have also just opened a new current account but for the first time no over draft facility. It seems a strange coincidence this has all happened and i can't help but wonder if closing that other card has caused a ripple effect! :mad:

VictimOfImpersonation

Could be, _rachael but I we must remember that there was some kind of government or FSA pressure on lenders to review accounts over the past few years which has meant some of my unused accounts were involuntarily closed and one or two limits decreased on others.

However, I have never voluntarily closed an account and Experian mark my credit score so "excellent" that others can open new accounts in my name without even a dob or telephone number or email or bank current account or existing business check!

So the answer to all these questions about how the UK credit / lending industry works I think is "Who knows?" and "It is a law only unto itself"

Kimberley

Thanks guys that all makes sense. I closed 3 accounts after settling them all recently because I did balance transfers on a new card that I was accepted for that has a normal interest rate on. My credit file has remained on good for the last year. I do have a Capital One credit card with a high interest rate and a high credit amount that I only use once in a while but pay off in full all the time. I only get a Tesco shop once every 2 months to keep the card going. I was going to cancel the card because of the high credit amount but I think I'll keep it open now.

fevlo

Kimberley wrote: »

Thanks guys that all makes sense. I closed 3 accounts after settling them all recently because I did balance transfers on a new card that I was accepted for that has a normal interest rate on. My credit file has remained on good for the last year. I do have a Capital One credit card with a high interest rate and a high credit amount that I only use once in a while but pay off in full all the time. I only get a Tesco shop once every 2 months to keep the card going. I was going to cancel the card because of the high credit amount but I think I'll keep it open now.

It does all depend if you may want further borrowing in the future, although holding accounts for a period of time and managing them well is viewd as a posative, having open accounts with high limits that are not used can be viewed as a negative when looking for new borrowing.
Lenders will score you based on affordability, this may all be ok with the high limit cards at zero but often lenders will take a "what if" approach and say "what if the person maxes out their high limit cards?, Can they aford the new credit as well as the existing ?"

It may be better to reduce the limit instead of closing the account and then run the account well as you have been doing.

Kimberley

fevlo wrote: »

It may be better to reduce the limit instead of closing the account and then run the account well as you have been doing.

Yeah ok I will do that. Can I ask if you know what gets paid off first, your balance transfers or purchases? I'm paying more then my minimum amount each month on my new card but I want to pay for my purchases before the 0% on purchases ends and then continue to pay off my balance transfers after that.

fevlo

Kimberley wrote: »

Yeah ok I will do that. Can I ask if you know what gets paid off first, your balance transfers or purchases? I'm paying more then my minimum amount each month on my new card but I want to pay for my purchases before the 0% on purchases ends and then continue to pay off my balance transfers after that.

Personally, I have no idea.
Its been a long time since I had a credit card and was then anything but responsable with it _pale_

Im sure someone will be along with the answer soon

Experian_company_representative

There's a little bit more advice in this Q&A on deciding whether to close old accounts, in terms of the impact on credit scores. Hope it helps.

James