Is your credit score penalized for having too many open credit cards? For closing credit card accounts?
Can you hurt your credit score by having many open credit card accounts that you are not using, even if there is no balance on them? If you cancel credit cards soon after you open them, can you hurt your score? If so, how long should you keep an account open before you close it?
You can hurt your score by closing old credit card accounts.
You will be reducing the total available overall balance you have on all your cards combined.
Never close your oldest account.
Your length of credit history is a big part of your credit rating.
The fico is so mysterious that I am not sure if having too many open credit cards (old), really affects your credit. It might be good since you have a lot of available credit and you know how to use it responsibly.
I really wish fico would really disclose this – how much available credit is too much.
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Every time you apply for credit, they check you credit history and that affects your credit rating. The more credit cards you have or apply for, the more you can go into debt and the less you can pay bills. Credit companies look at your total debt potential.
Cheers
I have said the so many times I can’t count them. The amount of credit cards a person has is not important, what is, is how they manage them as long as you pay on time and don’t exceed 30% usage of your credit limits you will be fine.
Canceling credit cards soon after opening them can damage your score since it will alter your debt to credit ratio but if you are not carrying balances the damage would be minimal.
everything and nothing affects your credit…ive had them tell me that even going to a car dealer and having them run a credit check will affect your score even if you don’t buy a car????/and its bad to have too many open accounts with too much credit avable and also bad to close accounts…what to do…i have no freaking idea!
If you have multiple open credit cards that you do not use you are better off closing them, however you shouldn’t close an account that you have had open a long time. You should always keep one credit card in use even if you spend $10 on it then pay it off. The longer you keep the credit card the better off your credit will be. So keep on credit card open, don’t close it.
The answer is no,
The amount owed on all accounts, and on different types of accounts is what is used to calculate your FICO score. As long as your total of what you owe compared to what your credit line is stays below 30% you will have no problems. In addition to the overall amount you owe, your FICO score considers the amount you owe on specific types of accounts, such as credit cards and installment loans.
Those unused accounts provide you with a higher credit limit and because you carry a $0 balance it will not affect your score.
In some cases, having a very small balance without missing a payment shows that you have managed credit responsibly, and may be slightly better than carrying no balance at all. On the other hand, closing unused credit accounts that show zero balances and that are in good standing will not raise your FICO score.
As to how long to keep it open, the longer the better because it builds a longer history. Closing a new account only lowers your utilization ratio and does not provide any history of your credit worthiness.
Hope this helps answer your question