I'm wondering, like a month or so ago I was talking to my friends about credit and they mentioned that if you have a credit card with a zero balance and don't use the card for a while then the bank can close the account and in turn seriously hurt your credit score especially if you've had that account for a long time. Is this true? 'Cause I have a few cards with a zero balance due to balance transfers to much lower interest cards.
2007-08-21 17:09:40 · 5 answers · asked by 818 Papi 4 in Business & Finance ➔ Credit
Banks can and do close "inactive" accounts, so if you don't use the card for a while, you do run the risk of their closing your account. However, that "seriously hurts your credit score" is a bit of an exaggeration. You won't lose a lot of points just because the bank closes your account. You will lose a few points because you have less available credit showing on your bureau.
High credit bureau scores are a function of 1) excellent repayment, and 2) untapped lines of credit (indicating that you have financial flexibility to continue making payments if you were to lose your job temporarily). Closing the account would reduce the amount of untapped lines you have which will reduce your score by a few points (depending on how many additional lines you have).
The key to a super score is to pay your bills on time and maintain 5 or 6 credit cards with little to no balance. Use each card once a month to fill up the tank, or for dinner out and pay the bill and you won't have to worry much about the bank closing out your line.
2007-08-21 17:22:23 · answer #1 · answered by cincinnati65 2 · 0⤊ 1⤋
Even though accounts have a zero balance, they still affect your credit score. Find a credit union that you are eligible to join and go and talk with the loan officer about credit scores. A good loan officer can pull you credit and discuss with you the good things and the bad. I assume you are young so find you someone who is willing to advise you. Credit scores are very important in this world.
2007-08-21 17:25:56 · answer #2 · answered by an-opinion 1 · 1⤊ 0⤋
I dont know if they can close your account. You would have to contact them directly as each credit card company is different. As to them closing your account - yes it will hurt your credit rating because it comes up as the creditor requesting closing. So find out first. If you do close an account, get your credit rating history make sure its listed as you closing the account not the creditor. If its not listed call the company to request they change it. It happened to me and thats how I took care of it.
2007-08-21 17:18:40 · answer #3 · answered by NOt going to be a hippocrit 3 · 0⤊ 2⤋
Banks are pretty influencial entities. I wouldn't be too suprised if they do this. They can even close your house and sell the stuff in it...how much more a CC??
2007-08-21 17:18:18 · answer #4 · answered by Lyonn 1 · 0⤊ 1⤋
Wow.... another conspiracy theory. Not seen anywhere but on the Internet.
2007-08-21 17:16:14 · answer #5 · answered by Common Sense 7 · 1⤊ 1⤋