A credit score is calculated by a mixture of factors. You may have heard that too many credit cards can lower your credit score. Canceling one of the credit card may seem like a simple solution. Unfortunately, canceling a card is not that simple. A canceled account can have a negative impact on your credit report.
Consider Age
The age of a credit card account is something to consider when canceling a credit card. Closing an older account could have a negative impact on your credit score. Because the time an account has been established plays a role the overall score, keeping an older credit card can improve your score.
Consider Balance
Each credit card you have is scored individually and then scored together with all your other cards. If the card you are canceling carries no balance, it provides you a good individual score. You are utilizing less of your available credit. By canceling the credit card, you lose that good score and the available credit. If you must cancel a card with a zero balance, make sure you pay down the other cards to keep your ratio the same.
Tips
A closed account will still show up on your credit report. The credit score may even still factor in the closed account. If you plan to cancel an account, make sure you do not have a balance. The banks can raise the interest rate. If you must cancel a credit card, make sure you do it properly. Contact the credit card issuer and notify them you wish to cancel the card. Also submit the request in writing.
0 comments:
Post a Comment