Comments on: More About Closing Credit Card Accounts and Your FICO Score

By: Noah

Noah — Tue, 12 May 2009 17:35:46 +0000

Thanks for the great article! I have a specific question that I’d like answered, if possible. I have several unused CC accounts, perhaps with $100K of available credit and $0 balances. I’d like to get a new card because all of the old cards’ introductory rates have shot up and I’d rather use a card with 0% on purchases/balance transfers, etc. I have just such an offer in my hand right now. However, before opening another CC account, I want to know if it will hurt my credit score. The card will only be used from time to time for business expenses amounting to a fraction of the total available credit (ie. less than 25%) and will be paid off in its entirety after my work reimburses me for my expenses (within a month). Please adivse. Many thanks in advance! Noah

By: Christine

Christine — Fri, 01 May 2009 14:18:40 +0000

I am 26 year old homeowner, with a fairly small amount of credit card debt. I have approx. 38K available to me with a total balance of 700.00 due. Since turning 18 I have opened several store credit cards and have one major credit card (I closed a major card and one store card about 3-4 years ago). I would like to closes some of these accounts, but fear my FICO score will drop dramaticly. On top of this I recently veiwed my Experian credit report and found an apartment I had co-signed on for a friend(no longer in touch) had a $150.00 balance go to collections. I was never notified of any balances due or being sent to collections, and am wondering what would be the best solution for me. I do not mind paying this debt, but have been told that it may just be better to wait for it to come off my report. What would you recommend I do to better my credit score as we would like to be able to refinance our home within the next year or so and want my FICO to be as high as possible

By: Aaron

Aaron — Fri, 17 Apr 2009 18:00:04 +0000

I just moved close to $4000 in credit card debt to a debt consolidation loan, which is an installment loan, for a far lower APR. I’m wondering if this will affect my score positively. Since the limit on this CC is $4000, does this mean that my utilization between these two accounts would go from ~100% to ~50%, since I now have $8000 worth of credit. Or is there some other way to measure this?

By: Amity

Amity — Sun, 05 Apr 2009 23:35:43 +0000

Now I am worried–I paid off two cards when I sold my house and immediately closed them. I am currently paying on two cards right now. I wish I had kept the other two open just to have a better score!

By: Mia

Mia — Wed, 01 Apr 2009 15:36:31 +0000

My oldest credit card (20 years) has a super high rate (20+%) and a high limit ($20,000). I currently have a balance on it. I applied for a credit card with 0% balance transfers but it would only give me a $2,000 line, I’m assuming because the high credit card limit is so high. When I next get a low transfer offer from another existing credit card, i am going to transfer the balance that way. I hate to close my oldest account, but I feel like the limit ties up getting credit with a better rate? Should I just close it and take my FICO licks?

By: Mike

Mike — Fri, 27 Mar 2009 00:26:05 +0000

What about closing a line of credit on an ING checking account? I would like to close my ING checking account – but it has a large line of credit associated with it that shows up on my credit report. Would that hurt my credit score?

By: Dan

Dan — Thu, 26 Mar 2009 16:47:42 +0000

Just something I thought I heard…doesn’t credit history usually only go back 7 years? so if you close a credit card that is say 10 years old, that you no longer use and still have one that is 7 years old would your length of history be affected?

By: Money Under 30

Money Under 30 — Thu, 26 Mar 2009 16:05:03 +0000

Jennifer, I think you may be right. It’s an area I need to research a bit more. But what I think happens is that when you take out a big installment loan (including an auto loan, or a mortgage), your utilization will shoot up and your score will dip. Then, as you pay off that loan, your utilization score drops.

In essence, the starting amount of the installment loan is your credit limit, and as you pay it down your utilization drops. This doesn’t seem fair to treat these accounts exactly the same as revolving credit, so they may score it differently, but I’ll bet it does factor in. Anybody know more?

By: Jennifer

Jennifer — Thu, 26 Mar 2009 16:00:05 +0000

I’ve read all about utilization lately, but I want to know how a mortgage affects that. I had great credit before I took out a mortgage. My credit report says that my mortgage is credit that is available and used, so my utilization as sky-rocketed. Now, my credit score is good but not as good as it was. I haven’t done anything to damage it at all, so I can only conclude that it’s related to my utilization. Is that right? If so, I think it’d be good to include this little mortgage detail when discussion utilization.