Question
Should I cancel a credit card I don't use anymore?
I currently have three credit cards. the first is my Wells Fargo Visa which I use often, the second is a Home Depot card that has a zero balance and I rarely use it at all, and the third is an automotive repair card called CarCareOne with GE Money that also has a zero balance and I never use it. I was going to get an American Express to have for a good long term card to build credit along with my Wells Fargo Visa. Should I cancel the two cards with no balance that I don't use and get the AMEX, or should I just keep them and have 4 cards or should I not get the AMEX at all and cancel the two others??? Any advice would be greatly appreciated. I had my credit pulled a year ago when I purchased my truck and it was 713 at that time. Keeping it high is the main goal and I've never paid anything late in my life. I am 23 years old and a home owner.(just to give some background)
2 months ago - 3 answers
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I agree with the answer given before. You should check your credit again as it can be very different from a year ago. If you go to annualcreditreport.com you can a free credit report from one (or all if you so choose) of the credit bureaus. This will not give you a score to get that you will have to pay, but the information will give you a good idea of where your score is. I would also be wary of the score you got from the finance company and or bank when you got your truck. Was this a fico score? Or was it some other type of score from the finance company or bank or an individual bureaus socre? AMEX may use a different type of scoring algorithm that would look very different from the one used by a bank or finance company. Many people do not think about this. The best indicator is your fico score. There is more to good credit than just paying on time. (although I do not mean to undermine the importance of that) Generally you should not close open credit accounts you currently have. This lowers the amount of time you have been managing your credit. Since you are only 23 you do not yet have a wealth of credit history im guessing. So you would want to leave these accounts open. It sounds like you do probably have a good credit rating, but you should always check, you never know whats been reported.
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Accountant/Financial Consultant
by Josh K
2 months ago
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Other Answers
Tough question sir. They've made some changes recently with the way FICO gets calculate. Closing accounts now does hurt your score. You typically want to keep the oldest account open. If they don't have an annual fee then it might be worth it to keep them open, unless they have some large limits. Your credit can vary GREATLY from a year ago, so I would suggest you check your reports (remember you can get one free each year). If you want your real FICO you will have to go to www.myfico.com to buy it, but Google around for some online coupons. And good luck with the Amex card, they are a little tougher to get than the rest.
by The Dude- 2 months ago
Keep those cards open, the longer you have credit history, the higher your score. Also, if you have any balances on your cards, the total credit limit is used in scoring, so you will have a lower debt to credit ratio, which will also keep your score higher.
by ningwasana- 2 months ago