To what extent does cancelling credit cards affect your credit ?

Answer 1

The simple act of cancelling is neither good nor bad. It is beneficial to have accounts that have been open and in good-standing for a long time, so sometimes you're better off leaving an account open. But, in general, there's no harm in closing an account. And you should definitely do so if you start to accumulate too many.

As for the response that any type of activity hurts your credit, that's just not true. Only hard inquiries (i.e. applying for a new card or loan) count against you. Soft inquiries (like you looking at your report) are recorded, but not counted against you.

Answer 2

If you cancel a card and it has a 0 balance, you are ok, it will help the credit rating. If you owe money and cancel it so you can't use it, many companies will assume that the credit card company closed it because of problems with you.

I had too many open cards with a 0 balance one time when I went to apply for a mortgage. The reason being that I could run up the balances and not be able to then pay for everything.

Keep a card or 2 that you have had for a long time, try to keep the balances low, you know, pay them off every month.

Answer 3

It usually lowers the ratio of the amount of available credit you have remaining compared to the total credit you have, because you're normally cancelling paid off cards. That will LOWER your credit score.

Answer 4

With out credit cards your credit rating goes down the tubes. I know because it happened to me. I cut up my credit cards once a just paid cash for everthing from soup to nuts. When i went to reapply for the cards 15 years later i was turned down because i had no credit rating.
Dont spoil your credit rating by doing what i did!

Answer 5

It should not but credit card companies swill punish you for doing that often. They do this by listing with the credit bureaus that they canceled it as a non desirable client. or they claimed they refused you further credit for other reasons.
You have to check it after wards.
It's like you are always smart to check several loan institutions out before buying a new car and financing it. But to get rates they have to be approved by creditors or loan companies like banks,'
If you apply to several credit places for credit it shows uip a red flag in your credit report and costs you points on your credit score. It's used as a way by loan companies to discredti you or punish you for not taking their loan and they all used it.

Answer 6

As a nationally known personal credit score expert (book, radio shows, newspaper column), let me tell you about a Chicago radio show host who wondered why his credit scores dropped 160 points after he paid off all his credit cards and wondered why I said doing that was good for credit scores.

I asked him, "What else did you do?"
He replied, "I closed all my credit cards."

Does that answer your question?
Don't close your cards unless they are department store or "merchandise" cards, like Best Buy--and NEVER close your oldest account.

Answer 7

Any activity or change to your credit report, even LOOKING at it, including cancelling a card will give it a downward pull. It's a temporary effect and will climb back up assuming you are a good steward of your finances.

Answer 8

It shortens your average length of your revolving accounts. Creditors want to see that you have a long history of good credit and payments.

Answer 9

It lowers the amount of available credit you have and it will lower your score, better to keep it open and not use it...