I have 2 major credit cards with a small balance on them. I also have about 6-7 credit cards from stores that do not have any balance on them and i was wondering if this negatively effected my credit and if i should start canceling some of them.
2006-12-19 03:18:22 · 8 answers · asked by Malissa 1 in Business & Finance ➔ Credit
The answer, in a nutshell, is yes and no. FICO (Fair Isaacs Company) scores use credit history (how long you have had credit) in detemining your credit score. Even if you do not use the cards, the fact that they are open lines (trades) actually increases your score as your credit history gets longer by the year. That is the yes part of the answer.
Should you close those cards, you will see your credit scores drop. With the two major cards, you do want to use those as they will be your active trades for scoring purposes. Just keep the balances below 50% (some say 30%) of the card's limit. Over 50% and you will start losing points.
The bottom line is that, if you do nothing with those cards, your scores will stay in the good range, so do not close them.
I hope that helps.
2006-12-19 03:35:43 · answer #1 · answered by Craig V 1 · 0⤊ 0⤋
Yes. Unused credit cards will lower your score. If you arn't using them, cancel the account. Just cutting them up is not an answer. You must make sure the account is closed.
Ideally you want to have at least four lines of credit that you use on a regular basis. A loan counts as a line of credit. If your credit cards have reasonable rates, then I would just use them for your purchases. Retail charge cards usually have high interest rates.
2006-12-19 12:18:01 · answer #2 · answered by Think.for.your.self 7 · 0⤊ 1⤋
No, it will not negatively affect your credit to cancel cards you are not using. It will only affect our ability to get credit if you have cards outstanding even if there are no balances. A co-worker had the same situation and was required to cancel all outstanding card he did not have a balance on in order to obtain a mortgage on a house that he did want and it delayed the process for two months.
2006-12-19 11:26:57 · answer #3 · answered by bottleblondemama 7 · 0⤊ 0⤋
Having them open shouldn't negative affect your score as long as you have a zero balance. If you do close them, this could adversely affect your score. The reason for this is depending upon your credit limits, it could increase your debt to credit ratio. It also can affect it if they have been open for a long period of time while your major cc's have been open for a short period. This decreases your credit history. If the retail cc's have low limits in comparison to your major cc's and they haven't been open for as long, personally, I'd cancel the accounts. This just ensures you won't use them and can give you peace of mind.
2006-12-19 11:30:40 · answer #4 · answered by Anonymous · 0⤊ 0⤋
In a sense it does effect it but not necessarily in a bad way. Keeping the accounts in good standing is the first priority, however the credit bureau does see all of your cards as potential debt and that is a factor.
2006-12-19 11:27:38 · answer #5 · answered by Jeremy 4 · 0⤊ 0⤋
Actually the opposite can be true. Scores are directly related to credit limit - balance ratios as well as payment history etc.
Here some more that may help.
2006-12-19 11:41:39 · answer #6 · answered by loanman46 2 · 0⤊ 0⤋
I was told by a credit company that having too many credit cards is bad although they didn't really tell me how much is too much.
2006-12-19 11:27:17 · answer #7 · answered by ♫ giD∑■η ♫ 5 · 0⤊ 0⤋
those unused cards are open ended accounts, even without a balance, and may bel considered "potential debt" thus becoming a liability if you are applying for a loan. I would cancel them immediately.
2006-12-19 11:29:52 · answer #8 · answered by teeyodi 2 · 0⤊ 0⤋