how does it affect your credit rating if you cancel a credit card but continue to pay it?

Answer 1

It shouldn't affect it as long as you are shown as being "current" on the card payments. Credit reports and ratings are more to point out high risk people rather than keep tabs on whether a card is active or not.

Answer 2

It depends (don't most things?)

If it had a high credit limit, then it will improve your rating because the amount of credit you now have available is less - this is only true if you're close to the max of your credit limit. However, another part of the algoritm calculates the amount of credit available to amount used (which shows how well you can be trusted to not spend to your limit), so the improvement may be tempered by that factor.

Understand that the algorithms are very complex, and sometimes actions have unanticipated outcomes. I would recommend reducing your credit limit to 1.5 times the balance and then pay the balance off.

Answer 3

According to the credit bureaus, it's best not to cancel the card. Just cut it up so you don't use it, continue to pay on time. The longer a card is active, showing no late payments(even if it's paid off) this increases your credit score.

Answer 4

As long as you pay your bill every month, on time, it will not affect your credit rating at all. If you are wanting to liquidate the balance, don't charge no more on the card! Once the balance is paid in full, the creditor will report that you paid on time, was never late. I hope that this helps.

Answer 5

If you cancel a card, you have closed the account. If you are paying on a closed account, I would say that you were behind on your payments. If this is the case, then yes, your credit is effected. You are late on a payment, your average account age is lower, and you have less open accounts which are in good standing.

Answer 6

if its your oldest account it effects your credit score, your credit is shown to not be as established for as long, its like the x amount of years it was open didnt exist anymore.

Answer 7

I found some good info here.