Need Credit Card Help

[Anonymous]

Hi, I'm new here. I am looking for good advice.

I have 8 credit cards and want to reduce them to half, but also want continue to improve my credit score. Three of the cards that I want to be rid of are paid off to a $0.00 balance. I don' tknow how much it would damage my credit score (or for how long) if I just called these companies and closed these cards. Or do I just keep the accounts open, but paid off and just don't use the cards. I really want to just be rid of them. I'm looking at re-financing my home this summer so want the best credit score possible, I'm just not sure what to do as far as the credit cards go.

I appreciate any input.

Thank You,

Kelly

[CH-7-Mission-Accomplished]

If you plan to go house shopping in the next six months, DO NOT close any of these open cards.  In fact don't do anything that could upset your good FICO scores until after you have closed on your home.

With credit scores there is something called the law of unintended conseqeunces, and sometimes seemingly innocuous moves can temporarily dramatically impact your scores -- for better or for worse -- so when planning to buy a home the rule is "leave well enough alone."

After you have bought your home and if you want to close and consolidate cards, then slowly begin closing one a month over the course of say six months, each month noting what has happened with your score from the last card closure.

If you are carrying any balances on your cards I would not recomend closing any open available credit lines until they are paid off.  Doing so will increase your utilization and drop your FICO score.

Just like people should not impulsively open batches of credit cards, they should also not impulsively close batches of credit cards.  If you want the accounts closed you can do it over a period of time so you can have some control over the FICO fallout.

[Anonymous]

If they have no annual fee just put them in your sock drawer. Let them age. They are helping your utilization and increasing your average age of accounts.

If they have an annual fee call the issuer and see if you can product change into a no annual fee version without losing your credit history or limit. Then put them in your sock drawer.

Unless they are costing you something, or you start to hear from lenders that you have too much credit already, just let them sit in a drawer.

[Anonymous]

Just like people should no impulsively open batches of credit cards

Heresy!  

[Anonymous]

Thank you so much for your inputs! I appreciate it! 

[takeshi74]

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@Anonymous wrote:

I don' tknow how much it would damage my credit score (or for how long) if I just called these companies and closed these cards

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This thread is linked in the Helpful Threads sticky in the Credit Cards subforum.

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

We can't tell you the impact in number of points.  However, you can calculate your utilization before and after to help you in making your decision.

I'd also suggest keeping them open until your mortgage is finalized.  Once that's done you can close the cards you no longer need/want.  You'd have to consider all the usual factors to determine impact but it's unlikely that you'll significantly improve your scores by closing cards.

[DaveInAZ]

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@takeshi74 wrote:

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@Anonymous wrote:

I don' tknow how much it would damage my credit score (or for how long) if I just called these companies and closed these cards

---

This thread is linked in the Helpful Threads sticky in the Credit Cards subforum.

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

We can't tell you the impact in number of points.  However, you can calculate your utilization before and after to help you in making your decision.

I'd also suggest keeping them open until your mortgage is finalized.  Once that's done you can close the cards you no longer need/want.  You'd have to consider all the usual factors to determine impact but it's unlikely that you'll significantly improve your scores by closing cards.

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I read that sticky last month and took this to heart: Closing a CC (credit cards) does not lower your FICO scores in and of itself  . . . . . In the long-term, a closed CC in good standing (nothing derogatory reporting) with a $0 balance will generally be deleted from your CRs (credit reports) after 10 years.

So, I decided to close on of my oldest TLs, Target Red Card issued by TD Bank, because of it's insulting & useless $200 CL. Rep kept trying to talk me out of closing the account and when I inisisted gave me this warning: "Well, it you close it you'll never get another CC from TD Bank." No problem, I assured her. Well, they closed it, and then deleted any record of the account ever having existed from all 3 CRAs. It did affect my FICO score, by lowering the AAoA. I did know it wouldn't affect my utilization as I'm under 5%, and losing a $200 CL when I have 1 $10k CL and a couple over $5k would have no meaningful affect..

So now I don't close any account. I have a Merrick Bank Visa that was useful in rebuilding but I've out grown and have no use for it. But I'm sure as heck not going to take a chance and close it, in case they pull a Target/TD on me. I'm also leery of SDing it, as that's what I did to Target, which caused them to lower the initial CL of $1k to $200. So I have a couple small monthly bills post to it, under $30, and PIF before statement, forcing it to report a $0 balance. Every couple months I also do a small swiped in store purchase on it, to reassure Merrick I still have a pulse and I do have the card in my wallet (on rare occaisions).

[StartingOver10]

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@Anonymous wrote:

Hi, I'm new here. I am looking for good advice.

I have 8 credit cards and want to reduce them to half, but also want continue to improve my credit score. Three of the cards that I want to be rid of are paid off to a $0.00 balance. I don' tknow how much it would damage my credit score (or for how long) if I just called these companies and closed these cards. Or do I just keep the accounts open, but paid off and just don't use the cards. I really want to just be rid of them. I'm looking at re-financing my home this summer so want the best credit score possible, I'm just not sure what to do as far as the credit cards go.

I appreciate any input.

Thank You,

Kelly

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• Don't close your cards before your refinance. It will hurt your overall utilization.  Keep the open and zero balance cards until you have refinanced to keep your score in good standing.
• 30% of your credit score is utilization. You could easily go from qualifying for a refi to not qualifying if you close out your zero balance accounts. Not really possible to determine without more info from you (cards, balances and credit lines for example).