So... I have a credit card that I haven't used in 3 years. I actually forgot about it and it's just been hiding in my wallet. It was my first credit card that I got when I went to college in '02. I stopped using it in '07. Dunno why. Just did. The 'rents told me to cancel it because they're paranoid about companies starting to charge fees for not using credit cards. I don't like having more than 2 cards and I only have 2 cards (not counting the one I'm canceling). If anyone is curious, it was a capital one visa card.
Anywho, went to cancel it tonight and the guy tells me tries to get me to keep it saying things like having it and not using it doesn't hurt your credit, a large part of your credit is based on how long you've had a card even if you don't use it and canceling it can hurt you more than not using it. Made me waffle a bit but I still canceled it. Did I screw up?
I cancelled one a while back because the company that issued it did some things to annoy me. Didn't seem to hurt my credit at all.
I would not have. 2 things:
1: open cards help your available credit. More available credit, typically higher score.
2: credit history is good, the longer the better. if this card was the oldest one you had, probably not a good idea to cancel it.
No.
Regular ontime payment history is the most important indicator in one's FICO I Love Debt Score. A "good" score only serves to ease snap decisions usually made by total dumbmake the beast with two backss that the person in front of them can make payments. I put good in parenthesis, because said person could have a high credit ceiling and be making payments ontime, but just barely and actually be one paycheck short of defaulting on all of their liabilities, yet they'll have a 700+ FICO I Love Debt score.
The faster people start telling business to make the beast with two backs off and start using their brains via manual underwriting again the better off our society will be. Until then we'll be seeing more 2008's/2009's economy wise.
Quote from: erkishhorde on January 20, 2010, 04:07:00 PM
So... I have a credit card that I haven't used in 3 years. I actually forgot about it and it's just been hiding in my wallet. It was my first credit card that I got when I went to college in '02. I stopped using it in '07. Dunno why. Just did. The 'rents told me to cancel it because they're paranoid about companies starting to charge fees for not using credit cards. I don't like having more than 2 cards and I only have 2 cards (not counting the one I'm canceling). If anyone is curious, it was a capital one visa card.
Anywho, went to cancel it tonight and the guy tells me tries to get me to keep it saying things like having it and not using it doesn't hurt your credit, a large part of your credit is based on how long you've had a card even if you don't use it and canceling it can hurt you more than not using it. Made me waffle a bit but I still canceled it. Did I screw up?
http://credit.about.com/od/toughcreditissues/a/closecards.htm (http://credit.about.com/od/toughcreditissues/a/closecards.htm)
5 Credit Cards You Should Never Close
4. Your oldest credit card account
Closing out your old credit cards shortens your credit history. Lenders tend to view borrowers with short credit histories as riskier than borrowers with longer histories.
Are you going to be making a substantial purchase like a car or a house soon?
If not, nothing to worry about.
Quote from: Randimus Maximus on January 20, 2010, 06:07:00 PM
Are you going to be making a substantial purchase like a car or a house soon?
If not, nothing to worry about.
yeah, don't bother worrying about your credit
now if you're not gonna need it for a while. ;D
I have 4 credit cards.
I use two of them.
Closed probably 3-5 over 10 years.
Most are department store closures as I used for initial discount.
My credit score is 750+.
No idea how that shit works, but closing cards has never hurt my credit score.
Quote from: derby on January 20, 2010, 06:48:04 PM
yeah, don't bother worrying about your credit now if you're not gonna need it for a while. ;D
he has two other cards.
doesn't use the one he closed.
I think he'll be fine.
Please consider all the wonderful benefits of researching things first, then acting. ;D ;)
Quote from: MrIncredible on January 20, 2010, 06:59:53 PM
Please consider all the wonderful benefits of researching things first, then acting. ;D ;)
I went by the 'rents said. Figured they knew something. [roll]
Haha, from a link in the page Derby posted:
QuoteQ: What about credit age? It is widely-reported, even among some reputable websites (including me) that closing your oldest credit card lowers your credit age thereby lowering your FICO score. Is that true?
A: We helped perpetuate that myth a little bit. In the old days, we were way too cautious [about the effect of closing an old credit card]. The FICO score calculation looks at both open and closed accounts. As long as the account history is still on the credit report, it's included in the FICO score. The catch is that at some point, credit bureaus remove accounts from account. Each credit bureau has their own internal structure for removing accounts, but it's something like ten years. So, that's not something you have to worry about for at least a decade.
Sweet, ain't gonna hurt me for another 10 years. :P
Quote from: erkishhorde on January 20, 2010, 07:27:13 PM
Sweet, ain't gonna hurt me for another 10 years. :P
that's just closing your oldest account... you still lowered your available credit which will likely affect you within the next three reporting cycles.
no good reason to close a no-annual-fee card.
I have no credit cards or credit card debt. I don't plan on buying anything that I can't finance through my credit union (they've financed all of my debt for the last 10 years and I owe nothing to them currently). I like them. My credit score is likely garbage, but I don't really care.
Yes, it does affect your score and it's not a good idea to do right before a home purchase or something similar.
However, I have canceled numerous credit cards over the years and still have an excellent credit report. I wouldn't worry about it too much.
One can have a credit score of 0 and still get a good rate on a home loan as long as their finances are in order. Manual Underwriting. Manual Underwriting. Manual Underwriting. Manual Underwriting. Repeat it often especially when in front of a lender. Manual underwriting just means they actually pull one's credit report and bank statements and use their brains to determine whether the person in front of them can pay back the loan.