I have heard that you should not close any credit cards so you can establish credit history. However I have also heard that recently opened cards, or too many cards can also damage your credit. Is there an age of the card to determine if you should close them. Should you close any, some, all, none? Just curious how the ages and amounts of the cards can affect you.
2007-01-31 12:35:15 · 8 answers · asked by KJB 1 in Business & Finance ➔ Credit
CREDIT HISTORY − 15% IMPACT on your score
This portion of the credit score indicates the length of time since a particular credit line was established. A seasoned borrower will always be stronger in this area.
It is not a good idea to close your credit card accounts because it typically will only hurt your score. It hurts your score by eliminating the credit "history" of making payments. It also decreases the available credit you have. If you have one card limit of 10k and debt of 5k it looks less favorable than if you had a 30k limit (3cards) and 5k of debt. They want to see you can manage having credit.
Opening new cards will initially lower the score until you charge one item and pay it off. It is similar to "will they pay the balance" (lower the score) and when you pay it at the end of the month the thinking is "oh, they paid it" (score back to normal.)
The older the card, the more history, the better it looks when open on your credit report, the more damage it causes when closed.
Of course, if you are worried that you might use the credit card if you have it--either cut it up or close it to prevent charging more than your budget can handle. Excessive debt would not be a fair trade for a good healthy score.
Hope This Helps! ~M
2007-01-31 12:57:27 · answer #1 · answered by Mollie Voigt 1 · 0⤊ 0⤋
Whatever else you do DO NOT close the oldest card you have on file. Also, if you close them all at once it could also negatively affect your credit score. About closing them at all, some credit folks say leave them open showing you were worthy of X amount of credit and paid it off, whereas some others say having too many cards open, even paid off, can show you have the capability of going nuts and running up a huge amount of debt available to you. Crazy stuff, credit scores....Congrats on paying your CC's off! :)
2007-01-31 12:48:15 · answer #2 · answered by Step into the Freezer 6 · 0⤊ 0⤋
are you paying any fees on the cards? if not, you should probably keep them open. FICO scores are mostly based on the amount of debt you have as a percentage of the amount of credit that is available to you. If you have little debt and a lot of available credit, that signals to credit companies that you are responsible with credit.
The other factor is how long you've held onto your cards. I dont know the details of this, but unless you have a HUGE number of cards, it is probably best to just hold on to at least a handful of the cards that you have.
I dont think that the total amount of credit available to you affects your credit score that much.
2007-01-31 12:48:20 · answer #3 · answered by Jeff G 2 · 0⤊ 0⤋
Thirty p.c. of your credit is calculated utilising the ratio of your credit used vs. obtainable credit, called a utilization ratio. something below approximately 35% is seen very helpful. (which ability you have $5000 of available credit, and you're no longer utilising greater beneficial than $1750 of it, case in point.) in case you shut all your money owed, that is going to ultimately harm your score, because of the fact it impacts this ratio. yet provided that area of your score is calcuated via factoring the variety of money owed and the variety (approximately 10%) The healthiest element on your credit is to close each and all the money owed yet one, and make sure that one has sufficient obtainable credit to cover you interior the form of an emergency. interior six months, your score will glow on the hours of darkness. via the way, congratulations. that is an magnificent feeling, isn't it? Now start up making an investment a number of that extra funds right into a retirement account until now you come back up with different makes use of for it.
2016-11-02 00:20:22 · answer #4 · answered by ridinger 4 · 0⤊ 0⤋
Credit cards will close by default if you dont use them for a long time.
2007-01-31 15:54:28 · answer #5 · answered by Anonymous · 0⤊ 0⤋
your credit history has already been established because you used them. if you don't plan on using them again then you should close them.
2007-02-03 19:30:48 · answer #6 · answered by luciousgreeneyedlady 5 · 0⤊ 0⤋
yes you should close the worse ones, you really only need 2 cards.
2007-01-31 12:49:18 · answer #7 · answered by iseemen 5 · 0⤊ 0⤋
i would,,keep one open for emergency only,,,that is what i am trying to do,,otherwise you will use them again and get in the whole again
2007-02-04 02:05:31 · answer #8 · answered by jerry 7 · 0⤊ 0⤋