Will cancelling a Chase credit card before activation hurt my credit score?

[Anonymous]

I have one credit card, with about a $2,700 limit that i've had for abt. 5 yrs. No debt of any kind. Always pay all my bills. Currently living with my parents rent free, working part time before I go back to school. And the chase card's limit was for $500. Also, if I do cancel how long will it affect my record, and my chances of getting a different credit card (like a department store card) or renting a apartment?

[guiness56]

Are you saying the card started with a $500 limit and is now at $2700?

Is this your only CC or your only open credit account?

[Anonymous]

Currently I have one open credit card that I have had for 5yrs. A visa through wells fargo that has a credit limit of $2,700. Today I applied for a Chase freedom credit card and got a approval of $500 credit limit. I have not recieved the Chase card in the mail, nor have I activated or used it at all. I'm asking what happens if I cancel the Chase card before activating it, or using it? Will it affect my ability to open other credit cards (like a Old Navy or Macy's card?) or when I go to rent a apartment in about a year and a half. 

[Walt_K]

It's not likely to have much of any effect on your future credit applications.  You wouldn't want to serially open cards only to immediately close them down, but doing it a few times is no big deal.  

That said, the Freedom is a good no fee card.  You've already taken the inquiry and it is going to report regardless of whether you close it down or not.  I'd keep it open and let it grow with you.

[Gunnar419]

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@Walt_K wrote:

It's not likely to have much of any effect on your future credit applications.  You wouldn't want to serially open cards only to immediately close them down, but doing it a few times is no big deal.  

That said, the Freedom is a good no fee card.  You've already taken the inquiry and it is going to report regardless of whether you close it down or not.  I'd keep it open and let it grow with you.

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+1

While it's true you wouldn't be hurt much by canceling, you have more to gain by keeping it and growing it over time.

[Anonymous]

Your credit file is virtually non-existent making lendors conservative. You need to add some credit cards, use them and your credit file will grow from thin to workable. As a college student your income in today's environment comes into play also. Creditors are required to determine your capacity to pay and base any account on ability to pay. Chase has been conservative over time and the Chase Freedom Card is known for lower CLs. You got your foot in the door with a good bank. Think about that. You will have a hard inquiry on your credit report.

[RobertEG]

Activation is a security measure used by creditors to ensure that the card was received by the consumer and checks this by assuring that activation is done at the home phone of the consumer.

Once they have approved the card, it is an active account that they can, if they choose, report to the CRAs.

Whether or not they will report a card that has never been activated or used by the consumer is their internal decision.

If reported, it may have both positive or negative score implications, the same as any other new account.

It will add CL to your % util scoring, and add a new revolving TL for credit mix scoring.

It will add a new account with zero age for AAoA scoring.

If you wish the account closed at user request, contact them, and ask if it will be reported in unusedcancelled at your request.

The only way to know for certain.....

[guiness56]

I agree to keep the card open.  Whether you use it or not.  You have a thin file and need to build it up.

[Walt_K]

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@RobertEG wrote:

Activation is a security measure used by creditors to ensure that the card was received by the consumer and checks this by assuring that activation is done at the home phone of the consumer.

Once they have approved the card, it is an active account that they can, if they choose, report to the CRAs.

Whether or not they will report a card that has never been activated or used by the consumer is their internal decision.

If reported, it may have both positive or negative score implications, the same as any other new account.

It will add CL to your % util scoring, and add a new revolving TL for credit mix scoring.

It will add a new account with zero age for AAoA scoring.

If you wish the account closed at user request, contact them, and ask if it will be reported in unusedcancelled at your request.

The only way to know for certain.....

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This is all true, but I would just note that in practice nearly all CCs will report the account whether you activate it or not, and whether you immediately cancel it or not.  Even if a frontline CSR tells you that they will not report it if you close it, I would not be surprised to see it show up on your report.  Though if you are told that they will not report the account, you may be able to ask the company to review the recording of the call and have luck getting it removed. 

[takeshi74]

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@Anonymous wrote:

Also, if I do cancel how long will it affect my record, and my chances of getting a different credit card (like a department store card) or renting a apartment?

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Cancelling doesn't really hurt your credit aside from the increase in utilization due to closing the account.  You've already taken the hits to inquiries and AAoA by applying.  As mentioned above, you really don't gain much by closing it.  You have a thin credit file and you won't build by closing it.

Further, credit isn't a matter of simple relationships such as "closing X means that your chances of getting Y are affected".  You might want to read up on the basics of credit scoring.  Your credit is assessed on utilization, payment history, derogs, AAoA, inquiries, number of accounts and diversity of credit.  There's also a sticky on closing credit cards in the credit card subforum that you should read.

What do you hope to gain by closing the account?