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Should I cancel some credit cards?

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Community Leader
Senior Contributor

Re: Should I cancel some credit cards?

It's a myFICO Forum term for "friendly, supportive, and respectful." Smiley Happy

Message 21 of 38
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Super Contributor

Re: Should I cancel some credit cards?


@Obscure-Expert wrote:


I would say w/ the OP's info provided you're knocking on the wrong door here.

 


It's just advice and doesn't need to be followed.  Regardless of all the "check" points you referenced, the OP was still denied.  That being said, doing another app for the same product and expecting a different result (non-denial) would for many be the definition of insanity.  My advice was only to prevent that from happening and adding unnecessary HPs to his CR.  If he doesn't care, that's all good too. 

Message 22 of 38
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Super Contributor

Re: Should I cancel some credit cards?

If you can't remember what app you put in, you should probably be freezing your credit reports so that you don't let fraud slip because you thought you may have applied for something. I personally would be very concerned if I lost track of what I applied for even once. I can tell you every app I have made since 10/2016 - who it was and what month and who they pulled. I couldn't fathom not being able to recall a more recent app. 



01/2019:
03/2020:

Closed: CareCredit $10K, B&H Payboo $7500
Hover over my cards to see my limits!
Goal cards: Cash+, Freedom.
Message 23 of 38
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Community Leader
Super Contributor

Re: Should I cancel some credit cards?

Welcome RunningwithScissors,

 

After reading everyone's responses, I decided to Google and see what I could find. I found an anaology by Julie Bawden-Davis, Supermoney, that kind of put what you're experiencing from credit card companies in perspective. She said:

 

"When it comes to getting a credit card, DTI is just as important as your credit score, if not more so. Think of your DTI as a piece of pie. If most of your financial pie is made up of debt, there’s not much left over to feed any new debt. For that reason, credit card issuers will opt to turn down your application. They will see your pie as too full of debt.

 

The article went on to say, in part:

If you applied for a credit card but were denied despite having good credit, the reason is most likely you have a high debt-to-income ratio (DTI). This all-important ratio may not directly affect your credit score, but it does play a key factor in whether you receive a credit card when you apply.... A debt-to-income ratio of less than 30% to 36% is generally considered a low (good) DTI. If it’s more than 40%, lenders consider you a high-risk borrower, no matter how good of a credit score you have.

 

https://www.supermoney.com/high-debt-income-ratio-credit-card-application-denied/

 



DEC 2019: EX 816, TU 820, EQ 810
DEC 2018: EX 777, TU 783, EQ 799

|| NFCU CashRewards $30K || AmX Cash Magnet $30K || Discover IT $24.7K || Macy's $20K || NFCU CLOC $15K || NFCU Platinum $12.5K || AmX ED $11.5K || CitiCostco $7K || CitiDC $6.3K ||
Message 24 of 38
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Re: Should I cancel some credit cards?

Thanks for all the responses so far. While we're on the subject, how do they validate income? Or do they just go by what I tell them? I know they're not calling my employer and I don't know if it's recorded anywhere else. Trouble is that the rental income goes into bank accounts dedicated to the properties, whereas my regular income goes into my personal account.

Message 25 of 38
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Community Leader
Super Contributor

Re: Should I cancel some credit cards?

Basically lenders go by what we tell them. However, some lenders may ask for POI before or after the approval. And then some can approve you, shut you down until after a FR and/or request a IRS 4506-T transcript all in one fell swoop.


DEC 2019: EX 816, TU 820, EQ 810
DEC 2018: EX 777, TU 783, EQ 799

|| NFCU CashRewards $30K || AmX Cash Magnet $30K || Discover IT $24.7K || Macy's $20K || NFCU CLOC $15K || NFCU Platinum $12.5K || AmX ED $11.5K || CitiCostco $7K || CitiDC $6.3K ||
Message 26 of 38
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New Contributor

Re: Should I cancel some credit cards?

Always think carefully when closing a credit card. For one, never close your oldest card. Preferrably, only close it if it's newer than the average age of your cards, even among cards that you never use. If you don't use a card and it happens to be your oldest, use it every now and then, just to give it some useage.



On radar:
Message 27 of 38
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Re: Should I cancel some credit cards?


@tigereyes wrote:

Always think carefully when closing a credit card. For one, never close your oldest card. Preferrably, only close it if it's newer than the average age of your cards, even among cards that you never use. If you don't use a card and it happens to be your oldest, use it every now and then, just to give it some useage.


Hmm...what's the thinking here? The oldest card I have is Discover, which I've had almost 30 years. I don't use it that much. Next longest would be Amex (actually, several different Amexes); although I don't have the same card I did when I got my first Amex card, my account goes back to the mid 1990s, and I use my Amex Schwab card the most. All of my other cards I've had less than 15 years, although some are related to older cards (e.g. when a bank discontinued one card and forced the switch to another).

Message 28 of 38
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Super Contributor

Re: Should I cancel some credit cards?

What tigereyes is referring to is your AoOA and indirectly your AAoA as well.  Closing your oldest CC today won't adversely impact you, but 10 years after closure when it falls off of your CR your AoOA will drop to the age of your second oldest card and you'll also lose that oldest account from being averaged into your AAoA.  Now, if you've got Amex cards that are only a few years younger, it's far less of a big deal... as in 10 years your then 40 year old AoOA would only drop to (say) 35 years or whatever. 

 

I personally would still do what I could to preserve that 30 year old Discover account, which really would only take a tiny swipe every 6 months or so to ensure it stays open. 

Message 29 of 38
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Senior Contributor

Re: Should I cancel some credit cards?


@RunningWithScissors wrote:

Thanks for all the responses so far. While we're on the subject, how do they validate income? Or do they just go by what I tell them? I know they're not calling my employer and I don't know if it's recorded anywhere else. Trouble is that the rental income goes into bank accounts dedicated to the properties, whereas my regular income goes into my personal account.


Financial institutions have a variety of ways to validate the income you claim.  There are numerous data brokers and secondary consumer data reporting agencies that maintain databases they can use to validate income.  One such source is Equifax's The Work Number which is used to verify employment history and income.  Some lenders, like American Express, will sometimes demand IRS Form 4605-T so they can get a transcript of your tax returns directly from the IRS.





Message 30 of 38
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