Multiple unused credit cards: better to cancel or keep for your credit score?

Question

I have about 20 credit cards that I never use. I'd like to maximize my credit score. Is it better to cancel most of them (say, all but 2) in order to have less potential credit liability, or would the short-term relationship (less than 2 years for most) be an indication of a lack of stability?

Answer 1

Ah, the age-old question. There are pros and cons to keeping them open and closing them.
Keeping the cards open and not using them is not helping your score any. Your score changes (and improves) when you USE the credit. You also look like a huge credit risk when applying for other loans. The lender will see all your available credit and say, "Hm. At any given time, she can go out and charge up (for example) $35,000 based on all her credit limits. That means I won't get paid if she splurges and gets into a pickle. DENIED!"
If you close the accounts that you don't use, your debt ratio (on the cards that you do use, if you have a balance) suddenly looks a lot larger than before. That can also make you look risky.
If I were you, I'd close almost all of the cards - keeping the ones that I'm likely to use as well as the ones w/ the longest history. History is an important factor in your credit score. If your really old CC accounts are in good standing, keep them open, close the newer ones.

Answer 2

Absolutely do NOT cancel all but 2 of your credit cards! Here is one main important item about your credit:

The one HUGE thing that can either help or hinder you is HISTORY. Your credit report has something called Months in Review. This shows how long you have had the Card. If you have very old tradelines they definitely HELP you if there are no late payments. There is also something called Date of Last Activity. This is there because it shows that not only do you have credit cards, but that you know how to effectively use them and pay the bill on time. Creditors don't make any money if you have numerous cards and never use them...in fact they may even be cancelled if there is no activity for years.

I am a mortgage broker, so from our point of view you can never have too many trades if they are all old and carry low balances. In fact you can partner up with a Credit Scoring company and make money off of having your numerous tradelines (you would have to e-mail me seperately for an explanation). If you are intent on cancelling some cards I would keep at least 4 open and active. I would chose the ones with the lowest rates, most benefits, oldest tradelines, and highest credit limits. And you are right about the credit cards under 2 years old...not as helpful to your credit since they lack strong payment history.

Answer 3

Well, a few years ago, it used to be that cancelling your credit cards only hurt your credit score temporarily, and your points came back quickly.
These days, cancelling does permanent harm, so you're better off just closing the accounts. This way you don't have to worry about them, but you still have a good credit score. Just use the ones that have the lowest APR, and no yearly fee. Perhaps you've got a couple that give you a rebate with every purchase. Something to consider.

Answer 4

yes definatly, cancel all but 2... Having to many credit cards shows irresponsibility, and credit companys will see you as a big risk. the lack of stability part on the other hand, shows through how long you keep a job.

Answer 5

You want to keep at least 2, 3 is usually what creditors look for. Keep them with low balances and close only your most recent. Keep at least the one that you have had the longest. This shows that you have established credit and can manage it well. If you close the ones you have had the longest it shortens your credit history and you are considered a higher risk.