Close Sub-Prime Cards?

Anonymous · ‎05-01-2017

Greetings Credit Warriors! As you can see by my post count, I'm pretty new at this.

For some background, I've been working on my credit in earnest for about 3-4 months. When I started, my scores were in the low to mid 500's. I've been able to pay off many of my accounts, and pay down others, bringing my overall utilization to under 30%. I was also able to open 3 new sub-prime cards- Blaze, First Access, and First Premier; all with $300-350 CL. I also have a few older cards- Total ($300CL), Capital One ($1800CL), Capital One secured ($300CL), and a local credit union ($1000CL). Also, a few days ago, I was approved by NFCU for a Visa with a $3750 CL (card hasn't arrived yet). My older cards are 3-10 years old. I also have a ~6 year old Fingerhut account with $2000 limit. I have several charge offs 3+ years old.

My scores (Fico 8) currently are EQ-628 TU-645 EX-631.

My question is whether I should close the 3 newer sub-prime cards. My goal is to get into a position to qualify for a mortgage, and I've read on here that lenders don't like to see sub-prime cards. Would it generally help or hurt me to close them; both in regards to mortgage scores and regular scores?

Mods: sorry if this is in the wrong section; please move if appropriate.

Thanks for any advice offered!

Anonymous · ‎05-01-2017

Leaving them open or closing them will do nothing to your score ... the tradeline and positive payment history will remain on your credit reports for years. So in theory, when a mortgage lender pulls your credit, they will see the tradelines, but whether or not they'll view them as good or bad really is up to the lender (and it may not matter unless/until they do a manual review).

My suggestion would be to close them, UNLESS you need their limits to help keep your utliization down (which, judging by your other cards/limits, I wouldn't think would be an issue). I would also close them if they have an annual (or even monthly) fee, especially if they're coming due soon.

There's a time and a place for subprime cards ... I think you're beyond it

Anonymous · ‎05-01-2017

Thanks, jjking54. I'm kinda leaning toward closing them, I just wasn't sure if that would cause any damage.

Anonymous · ‎05-01-2017

Just so I'm clear ... the "older cards" you mentioned are still open and in good standing, yes?

Anonymous · ‎05-01-2017

Close them ASAP. You already have better cards and they have served their purpose. There shouldn't be any type of negative effect from them. Just keep on working on your utilization and growing the other cards that you have. If you are planning on applying for a mortgage soon. don't apply for anything else while you work on growing your scores

Anonymous · ‎05-01-2017

@Anonymous wrote:
Close them ASAP. You already have better cards and they have served their purpose. There shouldn't be any type of negative effect from them. Just keep on working on your utilization and growing the other cards that you have. If you are planning on applying for a mortgage soon. don't apply for anything else while you work on growing your scores

+1 ... no new credit for at least six months prior to apping for your mortgage

Anonymous · ‎05-01-2017

Thanks y'all. I appreciate it. And, yes, my older cards are in good standing; a couple of late pays over the years, but nothing negative recently. And they are all paid off.

Anonymous · ‎05-01-2017

Close those subprimes for sure

Good luck!