How can I close credit cards w/o messing up my credit score?
First off, I’m 22 and have awesome credit. There is a house & a car currently on my credit. I have 5 credit cards open w/o any balances. I have never used 1 & used another 1x about 3 years ago. How can I close these w/o screwing up my credit score?
These cards are for specialty stores that I no longer shop at. At all. So I will not EVER use them.
2 of the 3 that I do not want to close are to the same place (home improvement store.) I do not use them often (2-3x a year max) but they have really high limits just in case something happens (like the fridge dying!) The 3rd is a basic CC from the bank. Low limit. Pay off EVERYTHING every month.
Why do you want to close them? You can’t close them without affecting your credit score; after all, your credit score takes into account the number of credit accounts you have and how long they’ve been open. What you’re asking is like pulling a cheerleader from the bottom of a pyramid and wanting the pyramid to stay up.
If you’re not going to be using your credit for anything in the near future (like 1 or 2 years), and you really want to close the accounts, go ahead. By the time you need your credit again, it’ll recoup itself.
By the way, not using your credit cards won’t help your credit score. You need to use it so you can pay it off. That way, the creditors can report you as paying on time. On my credit report, I can see which months I didn’t use my credit cards because there is no data for those months. I usually use my card to buy lunch, and then I pay it off in full at the end of the month so I won’t pay interest. Another bonus to using my cards is that I get reward points, and I can use my statements to itemize my expenditures.
Close the recent one. It will show on the report it was closed by you. However, keep the one from 3 yrs. ago so you still have lengthy credit history…unless of course your car and home go back farther.
In this day and age, it’s actually good to have at least one CC for travel arrangements. Hotels, rental cars, etc…require a credit card. If you are afraid of getting into trouble with it, call the CC company and have them lower your limit to something you’re comfortable with.
Closing any credit card simply reduces the amount of your total available credit and you loose the accounts history.
IF there are no fees, just let them stay open. If they want to close them for lack of use (which is becoming popular lately) then let them close it. You report will simply show “paid as agreed/account in good standing” and “closed by grantor”.
Either way as long as you keep your total balances owed under 30% of total available credit you will be OK. score wise.
As to paying the balance in full every month well once again that does not make ones credit report look that great as the creditor only reports that payment was made on time and your current balance.
To quote FICO “Even if you pay off your credit cards in full every month, your credit report may show a balance on those cards. The total balance on your last statement is generally the amount that will show in your credit report.
Hope this helps answer your question.