What happens to credit score if you close a store credit card?
I have a few store credit cards (Macy’s, Banana Republic, etc) in addition to a major credit card. I want to cancel some of the store credit card, but I don’t know how that effects my credit rating. I think closing credit cards in general lowers credit scores, but what about those store cards?
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If you aren’t carrying balances on other credit cards, it won’t make much difference, unless it is your oldest account.
If you want to keep accounts open, be sure to use them every 4 months or so to keep them from being closed due to inactivity.
I recommend that you only keep store cards if you have some special purpose and actually use the account. If you do opt to close a credit card, do it via letter and request written verification that the account is closed and 0 balance. Keep your request and the verification in your "forever" financial file — just in case.
A bad credit rating is obviously a big worry – if you are unsure of what rating you have then you should get it checked out – I tried at http://www.expertzworld.com/credit-guide.php – it gave an accurate picture of my credit worthiness!
i have similar experience, read it at http://1creditcardmerchantaccount.biz
Part of your FICO score is based on length of credit history. Unless you have an annual fee, keep your oldest cards. Read about closing cards here:
http://myfico.custhelp.com/cgi-bin/myfico.cfg/php/enduser/std_adp.php?p_faqid=169&p_sid=tds3ijwj&p_lva=3
Also, part of your FICO score is based on your debt-to-credit ratio. So, if all your available credit equals $9,000 and you owe $3,000. Your debt is 33% of your available credit. If you close an account with $3,000 available credit, your debit is now 50% of your available credit. Read about that here:
http://www.myfico.com/CreditEducation/WhatsInYourScore.aspx
While you are on http://www.myfico.com, click on Credit Education and read all the great stuff on that page.
Private Label credit reports do not reflect as well on your credit report as major credit cards do and they typically carry much higher interest rates.
Closing an account will have a negative impact in the short term. The best way to build your credit score is to make payments on time, have no more than two credit cards period, and try to keep your balance to no more than 30% of your Credit Limit (50% max)
score drops a little not much
If the card does not have an annual fee, never close a card, regardless of type.
By closing an open account in "Good standing" (& I am assuming they are), you are only lowering your utilization ratio. Pay them off & stick them in a sock drawer. They will only continue to age the account, helping your FICO score via "average age of accounts".
If you do nothing else, check your credit report (you can get it for free from all three bureaus at annualcreditreport.com).
If you are insistent on closing these store cards, you can at least make sure to keep your OLDEST store card open. Never close this card, use it at Macy’s or where ever it may be every 6 months & keep it alive.
Unless they have an annual fee, put it in the sock drawer & let time work. If the creditor closes them for inactivity, they will stay on your report for 10 years as a positive account. If they stay open until your 90 years old, they still only help your score.
There is never a good reason to close a positive trade-line.
Aly
If you are not in default, DO NOT Close the accounts. The older the account " In Good Standing" the better your score. Simply shred the card so you will not use it, but your score will go down if you close out accounts you have had for awhile.
Mike
IDK if it effects the score, but when you close them, it goes on the reports as cancel/close and nobody states why. So other creditors think something went wrong……..disputes etc. It’s like when your forced to resign from a job. Well you go for a new car and some finance officer see it and doesn’t want to give you the qualified car loan. Maybe you’ll just take back the car and say you don’t want it anymore.
closing any credit card will hurt your credit rating i was advised not to close mine and to use then once every 3 months even if it is a small amount.
It wont hurt you at all. It’s better you closing them verse’s the credit card company closing it.
it makes no difference ,, your putting way too much thought into your credit score
(…..Suze Orman…..lol)
Just never close out your oldest credit card, or the one with the most credit. This erases your oldest piece of credit history and will damage your score substantially.
Do not close the card cause it lower you available credit line. You also can use this service to pre-estimate future scores for different scenarios of credit card payments. – freecreditreport.sinfree.net