credit cards not in use-keep or get rid of?

Anonymous · ‎01-07-2010

My husband and I both have excellent credit. However in a year and a half from now we are going to sell our townhome and buy a new house. When I use my credit card, I always pay it off that month. I have some store credit cards and another card I don't use just sitting there. Are we better off keeping those with zero balance or closing those accounts? I am just wondering what will help my credit go even higher. How do these cards that I am not using affect my credit?

Creditaddict · ‎01-07-2010

KEEP! if they have no annual fee, especially a store card, it's a good mix and helping you... maybe go by some chapstick once in a while from them just to use every 6 months or so

Anonymous · ‎01-07-2010

You're fine either way - if you close them or leave them open. Store cards don't help your mix of credit, by the way. Mix refers to a mix of mortgage, installment and revolving accounts. (Refer to happy's guinea pig threads on these forums).

I like to keep my number of accounts small and easy to manage, so I tend to close unused store cards. However, closing them (or leaving them open) won't impact your FICO scores.

The exception to that is a consumer finance account. Closing those is always a good idea.

Is your overall plan to keep your scores as high as possible for the home purchase? What are your scores now? Post some more info and you'll get lots of feedback to meet your goals.

Best wishes!

Anonymous · ‎01-07-2010

Thank you both. Our scores right now are both 800! We will probably get rid of one of our car loans only to get a different car this spring/summer. Our motorcycle will be paid off in 6 months and hopefully my student loan by the end of 2010. I just want to see how high I can get our credit before spring/summer 2011.

Another question...if I do get rid of the credit cards (1 regular and 3 store) will it hurt my credit? I will keep the 1 credit card that we use and pay off each month. I just like my points that I get with it

Creditaddict · ‎01-07-2010

umm pretty sure a store card does help you... someone else chime in on this also, we have discussed it in length over the past

Anonymous · ‎01-07-2010

if I do get rid of the credit cards (1 regular and 3 store) will it hurt my credit? I will keep the 1 credit card that we use and pay off each month. I just like my points that I get with it

Look at "Helpful Threads" sticked at the top of this thread. Then select "Closing Credit Cards" for some helpful info on closing cards. FICO does want you to have at least one bank/national credit account (LOC or card or overdraft) open - so make sure you have one of those that remain open if you decide to close some cards.

Here's the thread on merchant cards: http://ficoforums.myfico.com/fico/board/message?board.id=creditcard&message.id=184342&query.id=12409...

You have a reasonable number of cards - so again, you're fine either way - at least as far as FICO is concerned.

Congrats on your beautiful scores! DH was at 804 with a mortgage, installment and one bank card. It's a good happy place!

Jazzzy · ‎01-07-2010

@Creditaddict wrote:
umm pretty sure a store card does help you... someone else chime in on this also, we have discussed it in length over the past

Hi Creditaddict...I don't think I've seen any evidence of people getting dinged by FICO for not having a store card. What I consider a "mix" of credit is: mortgage, installment, and revolving.

In fact...I've read postings here..one just today...that when auto insurance companies soft credit reports in order to quote rates, having "too many" store cards is seen as an element of higher risk.

I understand that there is a use for store cards. I think the decision to get a store card, however, should be made based on filling a credit or financial need...not based on adding to a credit mix. I personally don't have any store cards. I had a Sears, but somehow, sometime, it turned into a Sears Citi MasterCard. So, now my one store card is a general use MasterCard.