Closed credit card?

Question

One of my credit card companies closed my account due to inactivity. The card had been paid off for the past 2 years. Will this affect my credit score?

Answer 1

It might have a slightly negative impact in the short-term. But in the long run, you're better off closing old accounts. For one thing, the more open accounts you have-- the more chances someone could steal your information and ruin your credit. If you're not taking out a mortgage (or other BIG loan) within the next 12 months or so-- this small 'ding' will have little or no effect.

Answer 2

It could affect your score if you carry balances on other cards. Credit reporting agencies use your credit utilization as part of the formula for your score. So, if you had $5000 in available credit and balances totalling $2000 and the closed card had a $2000 limit, your utilization ratio went from 40% to 66%. That could pull the score down some. The closing could also affect your score if that card was open for a long time. In the time it was open and in good standing, that card helped build your score. If the other cards have been open for much shorter periods of time, the formulas MAY pull your score down a little. The closing itself, since it was due to inactivity shouldn't affect your score.

Answer 3

Yes, your credit score will be impacted negatively, but the impact will probably be slight.

The impact is negative because the amount of unused credit card debt is considered. The higher the better.

You might call them up and ask them to reinstate the card. Then used it two or three times a year just to keep it active.

Answer 4

I understand it is better if your credit cards are at a zero balance to close them because it will be better especially if you are looking to purchase a home.

Answer 5

Not at all, all a closed card means is that it is no longer active.

Answer 6

yes, negatively, b/c it decreases your credit history length, especially if it is your longest open