sam1000
Full Member
Cash: $ 21.05
Posts: 95
Joined: 28 Jul 2005
|
| closing credit cards |
 |
|
I currently have 12 credit cards with a total credit limit of $73,000.
My FICO is around 790 right now. I have no credit card debt.
The oldest card was opened in 3/99 so it's almost 9 yrs old and many of the cards were opened in 2000, 2002 and 2004. I use only 1 card that I like but which I opened only recently last yr.
I'm planning to close all the lines except 3 - keep the first one I opened in 1999, the one I actively use right now and a backup.
How do you think this would affect my credit score?
|
Sun Nov 25, 2007 7:43 pm |
|
|
efflandt
Senior Member
Cash: $ 80.45
Posts: 401
Joined: 25 Apr 2005
Location: Elgin, IL USA
|
Percentage of available credit being used is a factor towards credit score. But cancelling little used cards with short history and not much credit limit may not be much of an issue, if you don't carry a balance on any of them and keep the one with the longest good history. Cancelled cards will still remain on your history for awhile, good or bad.
If you have more than one credit card managed by the same major bank and you cancel one, they may shuffle your credit limit over to their card you still have.
Sometimes it is hard to truly cancel cards. When I wrote Discover to "cancel my card and accept no futher charges", they said if I used the card or any charges come through, the account would be active again (I destroyed the card).
|
|
Tue Nov 27, 2007 1:16 am |
|
|
s.jenkins
New Member
Cash: $ 1.25
Posts: 6
Joined: 12 Feb 2008
|
closed accounts do make an appearance for a couple of years. this happened to me and a couple of other friends.
|
|
Mon Mar 03, 2008 6:54 am |
|
|
Busta00
New Member
Cash: $ 0.80
Posts: 4
Joined: 04 Mar 2008
Location: NC
|
|
|
|
hi!
i have just cancelled a majority of my credit cards. it doesn't hurt your fico score. if you don't owe any amount of debt to them, becuase they are just merely status. the only way to hurt your fico score is have your debt owed on the credit cards be more than the credit available by 50% or more. your fico score really takes a pounding if you are late or never pay resulting in collections. like i said, i recently cancelled a majority of my cards and reduced the limits on the cards that i decided to keep. i reduced all the limits of my keepers to 2000-2500 to be safe. the risk of identity thief is too great now a days to keep huge lines of credit out there. i decided just to keep the majors, like american express, discover, visa, and a mastercard. so 4 total. also when i went to cancel them, i didn't consider tenor with them...what i considered was how were their services when i need them most. who waived fees, who was considerate, and who didn't max out my apr when the others did? so you would be savy and safe to reduce cards and limits. LIVE RICH!
kim
|
|
Wed Mar 05, 2008 5:59 pm |
|
|
pf101
Senior Member
Cash: $ 62.25
Posts: 311
Joined: 12 Sep 2007
Location: Portland, OR
|
The post above mine is incorrect. One of the major factors in FICO score calculation is history. By canceling cards you remove that history from your score which can have devastating consequences. Canceling cards isn't necessarily bad, but make sure you always keep your 2-3 oldest cards and cancel the newest cards with the lowest credit lines.
Personal Finance 101
|
|
Wed Mar 05, 2008 6:19 pm |
|
|
pf101
Senior Member
Cash: $ 62.25
Posts: 311
Joined: 12 Sep 2007
Location: Portland, OR
|
It doesn't remove it from your report but it removes it from your score calculation. Only open credit card accounts are included in your score. So if you have 3 cards, 1 each at 15 years old, 10 years old and 5 years old, your average account age is 10 years. If you close the first 2 your average age drops to 5 years which can do serious damage to your score. That's why if you must close accounts (and it's not a bad idea if you have a lot) you always close the newest and keep the oldest.
As for old closed account staying on your report, yes, they do. Good ones are supposed to stay indefinitely and bad for 7.5 years.
Personal Finance 101
|
|
Wed Mar 05, 2008 9:16 pm |
|
|
Busta00
New Member
Cash: $ 0.80
Posts: 4
Joined: 04 Mar 2008
Location: NC
|
hi!
it sure does stay on the records. creditors like to atleast see 3-4 credit activities in a history. as long as you had loans like auto, home, or student, it will be fine. credit cards are just a way to get yourself in trouble if you allow yourself the indulgence in the high limits. it is better off keeping only some and lowering unneeded high limits. like people say, "the more you make, the more you spend", "the higher the limit, the more you impulse buy". anyhow, it is all in how you manage it. i on the other hand have better things to do then print out a credit report everyday to check for fraud.
kim
|
|
Thu Mar 06, 2008 3:38 am |
|
|
cbass1017
Contributing Member
Cash: $ 4.95
Posts: 37
Joined: 18 Jan 2008
Location: PA
|
If your score is 790 than I believe you should be OK if you decide to close some of your accounts. I know that I work for a bank with very strict underwriting guidelines and as long as your score is above 760 you are considered to have perfect credit and would be eligable for the best interest rate possible.
Busta00, If you don't feel like protecting yourself against fraud thats fine(even though identity theft is the #1 fastest growing crime in america right now) but you should still consider visiting the credit bureaus' websites and do a little more research before giving false advice about closing all of your credit accounts. When you close your accounts your score is not going to "drop like its hot" as snoop would say  but over time it will affect your credit score. I believe thats pretty much been agreed upon by everyone else here.
|
|
Fri Mar 07, 2008 5:00 am |
|
|
|
