Question
I closed a bestbuy card and a military star card that I paid off. People keep telling me I shouldn't close any?
people tell me I shouldn't close any cards that I open. They say to just pay them off (which I did) and to just shred the cards and keep the accounts active. This way it looks good on your credit score. Could someone explain to me why it looks better to do that than to just close them out if you aren't ever going to use them again? Also, if I were to open those cards in the future again would that look negative on my credit score? Please explain. Thanks.
5 months ago - 2 answers
Best Answer
Chosen by Asker
If you think at any point that you might use a credit card again - do not close it. You are doing more damage to your credit score than necessary. If you do not use a card, the company that issued it to you will close it automatically - I have 2 that have been closed recently after no activity in 2 years. Credit scores work like this: Your FICO score is based on several different factors. 35% is your payment history, 30% capacity (how much credit you have access to), 15% length of credit, 10% accumulation of debt in past 12-18 months (i.e. opening new cards), and 10% credit mix (installment better than revolving). Your credit report does not give more weight to accounts on which you are primary than they do ones on which you are a secondary authorized user. If you close or remove yourself from an account, you now have a higher ratio of debt to available credit. Closing an unused card and opening a new card affects 65% of the information above that determines your score.
by leb
5 months ago
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Other Answers
Since you know yourself better than others do. Closing the accounts were best since you eliminated the temptation to overspend. Worrying about your credit score is useless, more important to worry about for financial health. Do that and everything falls into place. Borrow some library books and learn about budgeting, investing and living debt free.
by sassy2- 5 months ago