Closing Credit Cards Affects Score
Question:
I know that closing credit cards affects score, but what if someone has a LOT of cards?
Best answer:
Yes, it does affect the credit score because closing credit card accounts increases the debt to limit ratio. Instead of closing the accounts, just cut the cards up so you can’t use them. Sure, you can still use the account numbers to buy things online, but by not having the plastic in your wallet, you won’t be tempted so badly when out shopping, especially for those impulse purchases.
However, part of a credit score is how well you make payments. If you’re not making payments on anything, they can’t factor that in. You can always charge your gas, earn some rewards, but pay off the bill each month.
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I have to agree with Darlene
Your friend has already taken the hit for the inquiries and the new accounts reporting. He/she should keep the cards open and allow them to work for him/her.
As long as the friend is keeping those accounts in good standing and not over utilizing them, then the accounts are helping, not hurting.
If the friends credit is in such bad shape like you claim and if your friend follows your advice to close the cards, your friend would be going backwards and not forwards. The backwards slide could actually do even more damage and could set your friend back for quite awhile.
Credit repair has two sides, one is to work on the negatives and the other is to rebuild by establishing new credit.
Granted your friends existing credit limits are low and the APR’s are high, which is probably due to the existing negatives on his/her reports.
But if your friend makes it a practice to keep the utilization down, pay in full every month, request credit limit increases at least every 6 months, then he/she would be building a solid foundation for prime cards in the future. When that time comes is when your friend should start weeding out the subprime cards.
You are trying to tear down what your friend has achieved by telling him/her to close rebuilder accounts.
If you truly want to help, why not help your friend work on the negatives on his/her credit reports.
What is the point of being concerned about an affected 29.99% credit score. Keep them or don’t who would really care when reading the report. Besides the 14% ones are only $ 300. What are the odds that they will raise the credit line because of lesser cards before 7 years. None, do you have any idea what 29.99% is. Your friend is beyond the topic of this question. Your talking total loser credit problems for professional counsel.