How long do I need to keep a credit card in active status in order to avoid damage to my credit score?

Question

Be as detailed as possible please.

Mike, I KNOW that isn't true. What is your source? Don't you know that cancelling accounts too quickly has a negative effect? Where have you been?

Answer 1

Not entirely sure what you mean. It is true that under certain circumstances, you should not cancel an active credit card. For example, the credit companies consider a certain number of credit cards to be optimal (three or four I think); if you have more or fewer accounts, it affects your score slightly. If you want a perfect score you'll want to cancel or add accounts until you hit that ideal. But as far as I know canceling an account isn't disasterous to your score. There is one case you have to watch out for: Never cancel your oldest card. The length of your credit history is determined by the length of time of the oldest account. If you cancel that account, in six years it drops off, and then there is no more record of having credit during that time period! Your length of experience can go way down and this will definitely affect your score adversely.

Answer 2

How long must a card remain 'active' before my score is lowered?

Actually. your credit score rises the longer it is active. Of course your definition of active and the creditor's, credit bureau's and mine may vary.

I consider any open credit card as active. Delinquency above a few short time lates will quickly close it to further use.

To me, a card must be used at least once in two years, or the creditor is likely to classify it as 'inactive'. This DOES NOT hurt your credit score, however, this is done for security reasons. A quick call usually reinstates it right away.


"Active' and 'inactive' are relative terms, and neither adds or subtracts points.

Answer 3

The statistics show that if you have a credit card, you are MUCH more likely to acquire bad credit than if you don't have one at all. You should rip that credit card up, or at least put it in a bowl of ice and stick it in the freezer. Any negative effect on your credit is sooooooooooooo minor that you will hardley be affected at all. Check out www.daveramsey.com for more great advice.