I have a credit card acount that i have had very many many years, but never really used it and as such I would like to close, but when I tried to to close it with the company they informed me that closing it may lower my credit score, is this a true statement?
2006-07-25 07:46:11 · 8 answers · asked by Anonymous in Business & Finance ➔ Credit
Yes, closing a credit card may lower your score, especially if the credit limit is relatively high. Roughly 30% of your credit score is based on "capacity used": the ratio of current revolving debt (credit card balances, etc.) to total available revolving credit (credit limits). Thus, for example, if you close a $40,000 credit card with no debt, this ratio will increase and may negatively impact your score. However, obviously, if the credit card limit is relatively small (e.g. $500 Target card), then the impact to your score will probably be negligible.
Refer to this Wikipedia article for more details:
http://en.wikipedia.org/wiki/Credit_score
2006-07-25 07:58:14 · answer #1 · answered by Ron R 2 · 1⤊ 0⤋
Yes, if it's your oldest card your score will go down. From what I've seen, they don't average the age of your accounts, but they do start your credit history at your oldest active account.
If it's your oldest account by a lot of years, then keep it. (as long as they don't charge fees. If they charge fees, get them to stop! Give them the "listen, I've got plenty of cards that I don't have fees with" speech)
If it only predates your 2nd oldest acount by a few years and you have 15 years on other accounts, then don't worry about it, axe it.
The only concern with keeping the account open is your "credit max", the total amount you can charge if you went crazy one day. This number really isn't looked at too much, mostly with a home purchase, but if it's a concern, then ask your credit card company to lower your limit. Yeah, sounds crazy, but it can help in the long run.
(in the short run it may hurt your debt percentage. If you're under 30% and this will put you over, then don't do this until you're better situated, or skip that step entirely)
2006-07-25 11:15:58 · answer #2 · answered by Anonymous · 0⤊ 0⤋
Yes. New creditors see it as favorable to have a customer who has money available to them they do not need to use. This is why your score is better when you keep your balances under 50% as. Seasoning is partof the formula for credit score referring to how long you have had an account. Just cut up the card but keep the line open unless there are annual fees.
2006-07-25 17:56:31 · answer #3 · answered by unclejesse1 3 · 0⤊ 0⤋
they're attempting to maintain your account open. You get extra factors for having an previous account, yet you apart from could unfastened factors in case you have too many money owed. So, in case you have too many credit enjoying cards, you need to close the extra recent ones first. except you're speaking a pair of financial company of u . s . a . of america card... then you quite ought to close that account on the instant with the aid of fact they're the muse of all evil.
2016-10-08 07:39:26 · answer #4 · answered by ? 4 · 0⤊ 0⤋
YES
A longer credit history is better. Keep your old credit account open, just freeze the actual card!!
2006-07-25 08:00:34 · answer #5 · answered by ontario ashley 4 · 0⤊ 0⤋
For the life of me I don't understand why, but the answer is YES.
It's why I have about a dozen cards that I haven't used in years.
2006-07-25 08:38:45 · answer #6 · answered by Classy Granny 7 · 0⤊ 0⤋
Yes. Part of your score is how long you've had your credit.
2006-07-25 07:49:24 · answer #7 · answered by theobromo77 4 · 0⤊ 0⤋
Yes.
2006-07-25 07:53:12 · answer #8 · answered by Anonymous · 0⤊ 0⤋