Will cancelling my bad credit card affect my credit score?

Question

I have other cards that I have excellent credit history on, but this one card is really bothering me because I had more than a couple of late payments on it in the past. Is it safer for me to just cancel it out, rather than keeping it open?

Answer 1

Please read this article before you cancel it! http://www.creditfamily.com/credit-repair/close-credit-card.aspx

So many people make this mistake. Every credit card you cancel can lower the "average age of your acounts" which could lower your credit score. You can also change your "credit limit to debt ratio"

I would just leave the account open to collect dust and let it get old on your credit report. But read the article and decide for yourself. Good luck!

Answer 2

Good question. Even though the card has a bad history, canceling it will not get rid of it.. actually it may worsen your credit score because you will have a lower credit to debt ratio..

When you're trying to build a solid credit score it's important to get a comprehensive view of what is actually effecting it...
Your Credit Score (also known as your MyFico score) is calculated with the following breakdown:
35% - Payment History
30% - Credit to Debt Ratio
15% - Credit History
10% - New Credit
10% - Credit Types in Use

As you can see the Credit to Debt ratio is just as important as the payment history, the only problem is closing the card doesn't resolve the problem the way you hoped.

Now the issue is that you are concerned about your credit score, and that means you probably don't know what your score is, or what's going on. If you really want to have an idea of how and when things effect your score you should try a the 30-day free trial of Credit Score Tracker from MyFico... that way you will have a guard dog ready to bark whenever there are any changes and you can see right away what's going on. Plus you get a free credit score!

I've been using it for a year, and thankfully it has saved me many times. Here's a link..

30-day Trial of Credit Score Tracker with Free MyFico Score
http://millionster.com/go/fico30

Answer 3

yes, cancelling credit cards negatively affects your credit. The credit bureaus want to see well rounded credit...for instance...a car loan, a personal loan, a visa/mastercard, and a few revolving credit cards. When you cancell one of these, the bureau believes it to be that you cannot handle your money and credit. The lates that you have will be on your credit for the next 7 years. However, if you start establishing new good credit (paying on time every month) your FICO score will climb. Most lenders will only look at the last 12 to 24 months when you are looking for a loan. Look at you APR's and put yourself on a budget. Start making the largest payment you can on the card with the largest APR and continue down until they are all paid off. Just remember that the bureaus also want to see you using credit and being responsible with it. If you pay off all your credit and don't have any...your credit score will drop. Also, if you have a revolving credit card that you haven't used in a while (6 months or so) that will also negatively reflect on your credit and lower your FICO score. I know its all so confusing...I had to study and study to learn how to get and keep good credit because it is so important these days to have good credit. Hope this helps! Good Luck!

Answer 4

You will not lose the late payment history on your reports simply by cancelling the card.
The late payments will report for 7 years from the late payment.

Late payments are a fairly major score killer and if you add in the loss of utilization by closing the card, you will probably see your scores drop even farther.

It would be best if you only used the card for small purchases every 6 months or so and pay in full when you receive the statement.
If you cannot trust yourself with the card, then you might consider taking the score hit and close it.

You might also try a goodwill letter to the creditor and explain why you were late and request that they remove the late notations.
Many, but not all, creditors will work with people, as long as most of their history on the card is not filled with lates.

Answer 5

You dont need to cancel it. A Credit card for people with bad credit is a form of borrowing that often involves charges. So it's wise to compare terms and fees before you agree to open a credit or charge card account. Try looking for a credit cardwhich credit cards you should apply for? Shop around because not all credit cards for people with bad credit are created equal.

Answer 6

good question i was going to do the same thing the late charges and over draft just get higher and higher call and cancel so there will be no more charges and pay only the minimum so if your late it wont be another late charge .it shouldn't affect your score as long as you were responsible enough to cancel and are still paying it off , good luck .