Understanding FICO® Scoring

[deedimas]

4 years ago, I filed bankruptcy with a $12,300.00 debt. Shortly after filing, I applied for a high interest credit card, paying it off each month. Today I have 5 credit cards, all at zero balances and I would like to cancel 2 of them. Someone told me that this could hurt my credit score.. is this true? If so, how is that? My score presently is between 635 and 694 (depending on which company you go to)

[masdeocho]

Congrats on rebuilding your credit!

I would not cancel the cards.  You probably need them to establish your new history.  FICO looks at the average age of your TLs, so if you cancel some "young" ones, you are bringing down that number.

[AtomicBoi1983]

Please don't take this the wrong way but, why in the world would you even think about filing bankruptcy over a $12k debt. I make around 23k a year and have nearly 29k in debt between credit cards and installment loans and wouldn't dream about filing unless there was no way in the world I'd be able to make at least my minimum payments.

[Tuscani]

Generally you should not cancel the cards unless they are costing you money.. And even if they are you might want to keep them since you are rebuilding.

[Brammy]

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deedimas wrote:

4 years ago, I filed bankruptcy with a $12,300.00 debt. Shortly after filing, I applied for a high interest credit card, paying it off each month. Today I have 5 credit cards, all at zero balances and I would like to cancel 2 of them. Someone told me that this could hurt my credit score.. is this true? If so, how is that? My score presently is between 635 and 694 (depending on which company you go to)

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Deedimas.  there is not reason to keep high interest annual fee cards unless you can't do better.  If interest is the problem simply use it occasionally if they want your business they will gradullay bring that interest rate down.  If its annual fees, wait to the anniversary date and request it waived if they refuse dump em.  If its monthly maintenance fees dump em as soon as closing them wouldn't bring your total utilization to over 30% or so.

[Noah_Bodie]

deedimas,

Keep the cards. Contact each one and ask for an APR reduction, CLI, and waive of your annual fee. If you hit the point where you're applying for a mortgage, and the broker says "whoa, close a couple of these", then do it.

[Noah_Bodie]

AtomicBoi1983,

Everyone's situation is different. $12K might not be much to one person, but it might be the whole world to another. Years ago, I had a 70% salary increase in one year. Another time, I had a 30% decrease.