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Contributor
Posts: 109
Registered: ‎12-15-2008
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How bad is it? If you don't care and cancel a new account?

I had bad customer service experience and intend on cancelling the account the same month it was opened.. What if I don't care how bad it is for me? How bad is it truly anyway? I don't need the card and I can careless. How long will it affect my score if at all? I don't ever plan on going to this company again and they were crooks anyway. It has to do with an auto care card...
Super Contributor
Posts: 5,744
Registered: ‎01-28-2008
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Re: How bad is it? If you don't care and cancel a new account?

If the card is reporting on your credit reports, keep the card as a tool so the CL can be factored into your utilization calculation.  If you are being charged an annual fee close it. 
Valued Contributor
Posts: 1,157
Registered: ‎05-21-2008
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Re: How bad is it? If you don't care and cancel a new account?

 

My understanding is that it's not bad at all.  The bad came from opening the account, and from here forward, the effect to your FICO score is exactly the same as if you had left it open, except that in seven years or so it drops off, thus shortening your AAoA and overall limits, at which point it will be as if you never opened it.  So I wouldn't fret.


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Current Score: EQ: 749 - TU: ---
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Moderator Emeritus
Posts: 4,470
Registered: ‎12-31-2008
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Re: How bad is it? If you don't care and cancel a new account?

There's a great link posted under helpful threads at the top of the credit card board.  "Closing Credit Cards" by Fused

 http://ficoforums.myfico.com/fico/board/message?board.id=creditcard&thread.id=117125&jump=true

 

It'll affect your utilization when you close it (but that's only if you carry balances).

It'll affect your Average Age of Accounts when it drops off your report (usually several yrs. down the line) - by then the AAofA is usually minimal.

 

I just closed a three month account that wasn't working for me.  It's just fine.

Just puttin' syrup on something, don't make it pancakes.
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Epic Contributor
Posts: 28,098
Registered: ‎04-01-2007
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Re: How bad is it? If you don't care and cancel a new account?

It should drop off in 10 years, not 7.

Any negatives should drop off in 7 - 7 1/2 years.

I've closed a few cards over the last year or so without any damage to my scores. You just need to to be aware of possible impact on util, on # of cards reporting balances, and long-term loss of history. fused's post is great for helping you think through the whole process.
* 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
Contributor
Posts: 109
Registered: ‎12-15-2008
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Re: How bad is it? If you don't care and cancel a new account?

Yeah. I'm closing it, it will be okay as besides that credit I just got, I was approved for 5500 with a total of 3 other accounts this same time frame within the last 2 months, so I'll be okay in terms of util and age of accounts etc.
Contributor
Posts: 95
Registered: ‎03-27-2009
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Re: How bad is it? If you don't care and cancel a new account?

I had gotten approved and did not activate the card because it was not the card I applied for but they reported it as open anyway. I canceled it right away and my score dropped 1 point.
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Epic Contributor
Posts: 28,098
Registered: ‎04-01-2007
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Re: How bad is it? If you don't care and cancel a new account?


gadixie wrote:
I had gotten approved and did not activate the card because it was not the card I applied for but they reported it as open anyway. I canceled it right away and my score dropped 1 point.

More than likely, that was the point for the new account showing up, not because of the fact that you closed it.

There are no penalties in the scoring formula for closing cards. There can be indirect score dings due to higher util, increased proportion of CC's with balances, and so forth. But no penalty for closing per se.
* 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
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