Unless the idea of streamlined credit you have in your head is having 8 credit cards in a single wallet, then chances are good that you have considered canceling some of the cards you do not use much.
The truth about canceling credit cards:
Do unused credit cards hamper you credit score, or help it? Can removing old or outdated information make you look any better to bankers or lenders?
Closing your accounts will not undo damage that has been done. Once a card has been used, you cannot deny it exists. It becomes part of your permanent credit record and your credit report for at least the next 7 years. You could cancel the card the next day, the report info would remain. The same would go for any red marks that are associated with your accounts. Red marks are late payments, and charge offs, and overspending, etc. These things will fade with time, after 7 years they will fall off of you record. That said, you may not want some of those entries to disappear.
Why would you deny the good things? When you get rid of the old closed accounts that do not have any negative items, you are doing something silly. This is because you are benefiting from having a long, drawn out credit history, and those are accounts that are speaking to the credit history. The good entries are capable of remaining on your credit forever even though the bad ones fall off after a certain number of years. You really need to remember that as much as 15 percent of your credit score is directly dependent on how long you have been borrowing and repaying money.
Closing accounts may actually be capable of hurting your FICO score. Lenders are likely to take a long and hard look at your ratio between revolving credit account balances and the amount of total credit that you have. If you have accrued debt, then you are going to want to make sure that is kept to below 30 percent of the amount of available credit that you have - But the ideal amount of course is closer to 0%. You should definitely go ahead and make sure that those older lines of credit remain open, but make sure that you are not tempted or lured in by those lines of credit that you are not touching. When you end up closing out open accounts, then those credit lines will no longer be factored into your good credit ratio, and so you are going to be upping your debt ratio in a bad way. This is a silly thing to do and is going to end up costing you in the end.
Don't forget this concept - Because keeping the old, untouched lines of credit around can really help out your credit.
Photo Credits: The Consumerist
Originally posted 2009-11-20 03:11:57. Republished by Blog Post Promoter
Related Posts -
Restore Your FICO Score – Part Three In the previous parts of this article we discussed how FICO score can impact your financial status as well as the initial steps that you can take to begin restoring your FICO score. We covered handling collections first since they do have a big impact on your overall score, but...... -
Ruin Your Credit Fast, pt1 Granted, there are a wide variety of different ways that you can ruin your credit over time, but do you want to know what the quickest and most dangerous ways are? Here are five ways that you can quickly and effectively destroy your credit. 1 - Break your budget. Sure...... -
These Things are Hurting your Credit Score A person's credit score has become very important in this day and age. Your score is what creditors and lenders look at to quickly decide if you are a good or bad risk to lend credit to. It is important that you learn what types of actions hurt your score...... -
Don't Close These Credit Cards A lot of people tend to close out their credit card accounts if they get too far into debt with their creditors. Apparently they have some kind of notion that this will make the debt go away, when this could not be further from the truth. Not only is this...... -
The Dos and Donts of Credit Scores Pt 2 In an earlier post we talked about the Do's for good credit, so now it's time to consider the Don'ts! A credit score is a really important indicator on how likely you will be to default on a credit card or a loan. Your credit score is determined by a......
Related Websites -
When Diet Food Is Actually Bad For You When you first get on a diet, especially one that is calorie restricted, you’ll find that you are pretty limited when it comes to food choices. For many, it’s simply easier to take advantage of prepackaged meals. While these are expensive, there is a lot to be said for convenience,...... -
Creating a Sports Card Collection Since the 1800s, it has been a normal part of our culture to want to create a sports card collection. At first, boxing cards were especially popular, and then during the early 1900s it became popular to collect baseball cards as part of a sports card collection. The thrill behind...... -
Buying Graded Baseball Trading Cards Regardless of whether you are a die hard fan of sports or just looking to increase your collection of baseball trading cards, you should know that there is a wide variety of options available to you on eBay when it comes to buying graded baseball trading cards. Grading cards is...... -
Venus Williams Manages to Defeat Her Sister Serena on the Courts In an important season ending tournament, Venus manages to advance but unfortunately has to leave her sister, Serena, behind. Venus Williams recently managed to defeat her sister Serena in a set of three matches, with scores of 5 - 7, 6 - 1, 6 - 0. The match occurred on...... -
Lobby Cards Memorabilia -> Movie Memorabilia -> Lobby Cards Most devoted film buffs and film memorabilia collectors have at least a small collection of lobby cards. These cards are released when a movie is released and serve as promotion must like film posters do. Most major releases also have a set of......
- Card Shuffler Casino Collectibles
- Card Dealer Shoe Casino Collectibles
- Open Shelf Greenhouses & Terrariums Garden Structures & Fencing Yard, Garden & Outdoor Living
- Fall Seeds & Bulbs Vegetables & Fruits Plants, Seeds & Bulbs Gardening & Plants Yard, Garden & Outdoor Living Nursery
- Ghs Open G Tuning Bright Bronze Slide Acoustic Guitar Strings Acoustic Musical Instruments
Categories:
credit, credit cards
Tags:
3 comments ↓
If you really want to get rid of a credit card, you can just cut it up and throw it away. That way the credit line is still open but you can just forget it and not be tempted by using it.
I agree with you. But lately I’ve noticed that credit card companies simply cancel my credit cards that I haven’t use for a while especially if I have a few of them from the same bank. Smart move on their side.
I’m in Scotland, so maybe it works different over here..but I know having more cards gives you a higher overall credit limit across all your cards and lenders will compare this overall figure to your earning to make sure you can’t get into more debt you can afford to pay back. So because of this it is always better to cancel your cards if you are not using them. This may also help you get higher credit limits too.
Leave a Comment