Reply
New Visitor
SylviaLynn
Posts: 1
Registered: ‎02-08-2009
0

Don't Cancel Credit Cards!

This is a warning to others who might get caught in this trap.  I learned this lesson the hard way.  Don't cancel credit cards ~ it will lower your FICO Score!  My auto insurance company raised my premium because I had "too many credit cards," which made me angry because I only used a few and always paid at least the minimum amount and, for years, the whole amount owed, so my credit was excellent.  But I then cancelled a bunch of cards I didn't use, because they said I had too many.  BIG MISTAKE!  Doing that LOWERED MY FICO SCORE!  Having credit cards you've had a long time is a plus for your FICO score, and also a large amount of credit available to you is a plus, and I had large credit limits on those cards I cancelled.  My FICO is still good, but I resent having it lowered because my auto insurance company decided that I had too many credit cards!   
Frequent Contributor
74king
Posts: 403
Registered: ‎04-08-2009
0

Re: Don't Cancel Credit Cards!

I'm sorry this happened to you:smileysad: allot of us in the forum are aware of this. Canceling cards that have allot of age on them is never a great idea. It will come back to always haunt you but in any case thanks for sharing.

 

King :smileywink:

Equifax 787, TransUnion 793, Experian ? FAKO--> Who Cares
New Contributor
austintex
Posts: 74
Registered: ‎05-25-2009
0

Re: Don't Cancel Credit Cards!

Depending on the cards, you might be able to reopen some of them and keep the credit history.

 

 


 

- - - - - - - - - - - - - - - - - - - - - - - --
5/31/09 - 736 - EQ
Valued Member
MaxPower
Posts: 27
Registered: ‎05-13-2009
0

Re: Don't Cancel Credit Cards!

I canceled them anyways. My score will recover.
Senior Contributor
score_building
Posts: 3,578
Registered: ‎01-10-2008
0

Re: Don't Cancel Credit Cards!


austintex wrote:

 Depending on the cards, you might be able to reopen some of them and keep the credit history.


reopening is typically a possibility for a brief period after closure (like 30 days) depending on issuer so act quickly.

FICOS:
06/13 EX 765 (PSECU) EQ 771 (DCU) TU 779 (Barclays)
Moderator Emerita
Community Leader
Epic Contributor
haulingthescoreup
Posts: 28,098
Registered: ‎04-01-2007
0

Re: Don't Cancel Credit Cards!

Generally what whacks your score is losing the credit limits from the closed cards, if you have balances posting on the remaining cards.

The damage from lost history doesn't happen until up till ten years later, when they fall off your reports. Or whenever Equifax decides to dump them.
* Credit is a wonderful servant, but a terrible master. * Who's the boss --you or your credit?
FICO's: EQ 781 - TU 793 - EX 779 (from PSECU) - Done credit hunting; having fun with credit gardening. - EQ 590 on 5/14/2007
Established Contributor
l9ikjam
Posts: 662
Registered: ‎09-07-2007
0

Re: Don't Cancel Credit Cards!

Sounds like u need to end the relation with the insurance company. Sounds like they just wanted a reason to get more money out of u.
Advice is what we ask for when we already know the answer but wish we didn't.
Regular Contributor
SocalMark
Posts: 151
Registered: ‎06-09-2009
0

Re: Don't Cancel Credit Cards!

Please someone explain why the insurance company cares about credit cards?
New Contributor
Smrtshppr43
Posts: 68
Registered: ‎09-19-2008
0

Re: Don't Cancel Credit Cards!

They don't. They care about your fico score. Evidently they think that people with bad credit are bad insurance risks also, so if your credit sucks, you pay higher insurance premiums. That is my one and only quarrell with Dave Ramsey. He goes on and on about how his fico is zero and a afico score is an "I love debt" score. No, for me, it's an "I like lower insurance premiums" score. So. for those of us who are not multi millionaires like him, we need to have a good fico as we can.

 

Sorry that happened to you. I just closed my Merrick card today. They did not give one whip about my decision to close it if they would not take away the annual fee. They could not care less. I say good riddance to them. I just refionanced my house to 4.5, and opened about $25000 worth of credit limit cards in the last month, so I think I can recover from the small loss my fico might take from closing that little stinking Merrickl card with a limit of only $1350
New Contributor
thoughts1
Posts: 110
Registered: ‎01-12-2009
0

Re: Don't Cancel Credit Cards!

[ Edited ]

people forget average age of accounts is not affected by closing a card for 10 years!

that's the single most overlooked thing when someone is afraid of closing cards, because they think it affects it right away.

i'm all for closing cards that don't work for you, that don't grow with you, that have no rewards, etc.

Message Edited by thoughts1 on 06-24-2009 09:55 PM

myFICO is the consumer division of FICO. Since its introduction 20 years ago, the FICO® Score has become a global standard for measuring credit risk in the banking, mortgage, credit card, auto and retail industries. 90 of the top 100 largest U.S. financial institutions use the FICO Score to make consumer credit decisions.

>> About myFICO
FICO Score - The Score that matters
Click to Verify - This site chose VeriSign SSL for secure e-commerce and confidential communications.
Fair Isaac Corporation is a BBB Accredited Financial Service in San Rafael, CA
FOLLOW US Social Media Facebook Twitter Pinterest Google+
}