Say I get 10 credit cards in one day and hold them for 10 years. My Average Length of Credit is 10 years.
Say at that point I open and close a credit card in 0.1 year. Is my Average Length of Credit
- 10 years ((10 cards * 10 years / 10 cards)
- 9.1 years ((10 cards * 10 years + 1 card * 0.1 year) / 11 cards)
In other words, do the credit agencies calculate Average Length of Credit only using open accounts, or do they calculate it using closed accounts, additionally?
I would like to know this because I've recently become enamored by the sign-up bonuses of credit cards. It is all to easy to open and close multiple cards in a single year just for the 30K miles or $100. I thought that I could simply halt the behavior two years before applying for a major loan (car/house) to get rid of the hard inquiries, but now I am concerned that my average length of credit would go down tremendously by doing this.