Keep Old Accounts Open: The Secret to Boosting Your Credit Score

The simple trick that raises your credit score, and gives you access to unbeatable interest rates.

You may have just read that quote and thought, “Of course, Experian would say that—they just want me to keep my accounts open.”

Yes, but it’s not only for their benefit.

Keeping your oldest credit account open is the secret to boosting your credit score, even if you never use it.

Quick Story

At 18, I used to sit on the floor beside my bed and call credit card companies with a script like this: “Hi, I’m 18 years old and want to open my first credit card with you, but I need to learn more about it. Can you explain how it all works?”

You’d be surprised how many customer service reps were happy to help a young, inquisitive person. They handed over tips, tricks, and inside information on how to “beat the system.”

I became obsessed with my credit score. I’d check it multiple times a week, run credit simulations to find tweaks that would increase it, and write step-by-step plans for improving it over a six-month timeline—OCD, I know, I own it.

Nonetheless, I learned a lot. One of the most important lessons was never to close my first credit card!

Here’s The Point

80% of your credit score is impacted when you close an old account. That’s because three simple factors make up most of your score:

1. Payment History

2. Length of Credit History

3. Credit Utilization Rate

Payment history

35% of your score is determined by how well you’ve paid your bills. You build a flawless payment history when you pay at least the minimum, pay it on time, and don’t miss deadlines.

Length of credit history

On average, how long you’ve had credit makes up 15% of your score.

For example, if you opened your first account 10 years ago and your second account this year, your average length of credit is 5 years (10 years / 2 accounts). However, if you close your oldest account, your new average would be only 1 year (1 year / 1 account).

Credit utilization rate

30% of your score is based on how much credit you’re using. Lenders add up all your credit limits and compare them to how much you’re currently using. The less you use, the better your credit score.

But closing your oldest account will:

1. Erase your longest payment history

2. Drastically shorten your length of credit

3. Increase your credit utilization rate

All of which can hurt your credit score.

Here’s what would happen if I closed my oldest account:

A Word of Encouragement

When used wisely, your credit history is a powerful tool. It influences everything from interest rates to loan approvals and even your ability to negotiate terms that banks and lenders don’t advertise.

So, before you close your oldest account, consider what might happen. That old account might open doors to better opportunities—especially if you plan to make a big purchase soon.

-Isaiah from Earn Out Loud

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