Cancelling a card (re: credit score)...

[smallfry]

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@Anonymous wrote:

Hello, to start off, I'm 25 years old, and my credit score is around 740/750.

Right now I have 5 credit cards, 4 of which I would like to keep (major cards, great rates, benefits etc).

The only card I want to cancel, is the card I have had the longest (2 years at most). It was my first credit card, and I was a college student, and I got it from 1 Financial Bank USA. This card really doesn't benefit me in the least. Has relatively high APR's compared to my other cards, and doesn't really offer any benefits for the future. Now that my credit is somewhat established, I'd like to cancel it, but from what I've read this can hurt me more than anything.

Out of the cards I have, I have generally low limits. So all of the cards total is about 10k (if that). Out of that, right now, I only have 2.5k on a one major card with a 6k limit with zero APR. This will be paid off by January of 2008. The 1st Financial Card has a 2.5k limit.

So all in all, would closing this one hurt me that bad? I'm sure it will take a hit to my credit score, but I would rather keep open only the ones I want open, and focus on those, and becoming reputable with major companies that can benefit me in the future. Even if it does hurt me a little now, would it be back to normal in a year or so with keeping a low balance (20% or less on my total credit limit), no late payments, no more credit cards and so on?

I hope this makes sense, and I appreciate and welcome any help and advice I can get.

Thank you in advance.

-Matt

Edited - Also, I had an American Express with an annual fee, and I recently upgraded to a better card with no annual fee, lower APR, etcetc. I closed the previous AE account, but it still shows me as a member from my original date, will this alter my score at all as well?

Message Edited by Matthew on 07-20-2007 06:14 PM

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Closing the sub prime card will help you get in with the prime lenders. You won't lose your history if you close it. Stays on your report and counts towards age for ten years. Unless you absolutely need it for utilization get rid of it.

[smallfry]

Oops. Yeah it would hurt your U. Either pay the balances down or get some new cards.

[VLGaffEsq]

Without having even finished your post or the other replies, PLEASE DO NOT CANCEL this oldest credit card of yours, as it will significantly hurt your excellent FICO score, without a doubt!  About 30% of your FICO score  is derived from your "length of time you have had credit," so you should always KEEP the one card you have had the longest.  Secondly, if you canceled this card you would lower your "available credit," which would further adversely affect you credit score.  Simply put, your have an EXCELLENT FICO scre, and it will only go higher as you pay down all your revolving debt to below 9% of your available credit.  Good luck and keep up the good work on having excellent credit!

[Anonymous]

Thank you all for the valuable help.

If I didn't come to this site, I would of more than likely closed it without considering the effects.

Just a curiosity question, say I had two cards that were my first cards I got to establish my credit right around the same time. Would closing one hurt me in the sense of length of time I've had credit?

I know it will lower my overall credit, raise my overall percentage and so on, just curious.

[fused]

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VLGaffEsq wrote:

Without having even finished your post or the other replies, PLEASE DO NOT CANCEL this oldest credit card of yours, as it will significantly hurt your excellent FICO score, without a doubt!  About 30% of your FICO score  is derived from your "length of time you have had credit," so you should always KEEP the one card you have had the longest.  Secondly, if you canceled this card you would lower your "available credit," which would further adversely affect you credit score.  Simply put, your have an EXCELLENT FICO scre, and it will only go higher as you pay down all your revolving debt to below 9% of your available credit.  Good luck and keep up the good work on having excellent credit!

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Positive CC TLs rather open or closed ($0 and no derogs) are weighted and scored EQUALLY! Closing the CC DOES NOT EFFECT credit history length or average age of accounts. Closed ones age the same way open ones do. Again watch the Util% when closing CCs, that's it. I know this is hard to believe but its the truth.

[MidnightVoice]

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fused111 wrote:

Positive CC TLs rather open or closed ($0 and no derogs) are weighted and scored EQUALLY! Closing the CC DOES NOT EFFECT credit history length or average age of accounts. Closed ones age the same way open ones do. Again watch the Util% when closing CCs, that's it. I know this is hard to believe but its the truth.

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But I still maintain that open TLs get older and closed ones don't 

[fused]

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MidnightVoice wrote:

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fused111 wrote:

Positive CC TLs rather open or closed ($0 and no derogs) are weighted and scored EQUALLY! Closing the CC DOES NOT EFFECT credit history length or average age of accounts. Closed ones age the same way open ones do. Again watch the Util% when closing CCs, that's it. I know this is hard to believe but its the truth.

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But I still maintain that open TLs get older and closed ones don't 

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Nope! The only difference is the closed ones will fall off 10 years after being closed and the open ones, if reporting positively, can remain indefinitely.

[fused]

http://ficoforums.myfico.com/fico/board/message?board.id=ficoscoring&thread.id=4402