Credit rating question

[pete6032]

I have a good score, around 800, no debt other than my mortgage. In the past couple months I've closed two cards. One I no longer used so it got closed automatically and another I closed because I didn't want to pay the annual fee. Will closing these cards hurt my credit rating? I'm not worried about a short term hit since I don't need a loan for anything in the next few years. I have two cards open at the moment, will likely add a third if I can find a good introductory offer.

 

[Svnla]

You will get ding a little because your total credit line (total dollars of all credit cards) will be lower, therefore your utility rate will be lower but you will be fine in a few months.

 

[Lanyap]

The older the CC the more ding you get when they close. The credit limit plays a role also. If you closed two high limit, older cards you may see a big ding. It may take a few months to show up on your credit report. This is why I keep my oldest CCs from 1980s and 1990s and charge on them every few months.

Should You Cancel Your Unused Credit Cards or Keep Them? - Experian

Learn when it makes sense to close unused credit cards and why it’s better to keep unused credit cards open. Plus review tips on how to cancel a credit card.

www.experian.com

 

[Lost_in_the_HTTP]

How old were they? How long had you had them? I have one listed on my file from a credit union I was in over 20 years ago. The account was 'closed' more than 15 years ago, yet it remains in my file which dramatically extends my history. I have no intention of correcting that error.

Closing your oldest cards can shorten your history and that can be a huge ding. If it was more recent, then you only have the reduced total credit limit to be concerned about.

 

[pete6032]

How old were they? How long had you had them? I have one listed on my file from a credit union I was in over 20 years ago. The account was 'closed' more than 15 years ago, yet it remains in my file which dramatically extends my history. I have no intention of correcting that error.

Closing your oldest cards can shorten your history and that can be a huge ding. If it was more recent, then you only have the reduced total credit limit to be concerned about.

I think they were maybe 6 and 2 years old respectively, so not my oldest card for sure. I'll be interested to run a report in a couple months and see what's up. Not that I am in need of a loan or at risk of being denied anything based on my score.

 

[s0me0nesmind1]

Depends. How old were the cards? If you have a long credit history with one of them and they have been open for years and years, that can overall ding your score a bit.

Overall, if anything it will be minimal though. 50pts max, but most likely ~20 maybe.

 

[s0me0nesmind1]

I think they were maybe 6 and 2 years old respectively, so not my oldest card for sure. I'll be interested to run a report in a couple months and see what's up. Not that I am in need of a loan or at risk of being denied anything based on my score.

You can get free credit monitoring from a variety of sites. Credit Karma is a popular one.

 

[Svnla]

Speaking of credit reports. You can get free credit reports from all three major credit report bureaus. Free weekly until next year.

Annual Credit Report.com - Home Page

.

 

[Lost_in_the_HTTP]

My credit card sites offer free reports.

 

[kn51]

I liked how I got dinged for having everything paid off (including a mortgage).

 

[Lost_in_the_HTTP]

^^ Yup. No current debt and payments doesn't show you to be a reliable debt payment payer.

Kind of like homeowner's insurance. Many companies won't write you a policy if you don't have a current pol;icy.

 

[highland145]

I liked how I got dinged for having everything paid off (including a mortgage).

Yep.

Gotta be in the game to play the game....

 

[purbeast0]

I close 5 cards within a 2 year period pretty much for the past decade . My credit has never dipped below like 824 in the past 10 years. You will be fine.

 

[nakedfrog]

My oldest account is listed as 21 years 5 months, and yet when I look at the analysis for "potentially negative items", it lists "Length of time accounts have been established". Apparently it isn't old enough until it hits 25. But my score is also 826, so I guess that's just one of the things keeping it from getting closer to 850.

 

[zinfamous]

My credit card sites offer free reports.

well, they offer you free score checks. I don't think they offer you the actual reports. The full reports are....detailed. Scary so. I think you can typically pull one per year for free from the credit agencies, and it's scary the crap that you find in there.

 

[highland145]

well, they offer you free score checks. I don't think they offer you the actual reports. The full reports are....detailed. Scary so. I think you can typically pull one per year for free from the credit agencies, and it's scary the crap that you find in there.

Pay your bills. :colbert;

 

[BarkingGhostar]

I liked how I got dinged for having everything paid off (including a mortgage).

As I was told 20 years ago, if you have everything paid off then you have no means to show you are able to pay a regularly recurring payment.

 

[BarkingGhostar]

Hey, also keep in mind that there are different systems for different things. For instance, what a lender seeks for weighing in on your situation for a mortgage differs from a car loan, which differs from a credit card offer.

 

[highland145]

Hey, also keep in mind that there are different systems for different things. For instance, what a lender seeks for weighing in on your situation for a mortgage differs from a car loan, which differs from a credit card offer.

Some years back, we were getting a heloc. Debt ratio was something like 20%. Had a rental making $250/mo with no contract. Underwriter wouldn't move forward without a rental agreement. Today, I'd tell them to fuck off.

Maybe I should call them now....

 

[bbhaag]

I liked how I got dinged for having everything paid off (including a mortgage).

Yeah my wife and I started noticing the same thing a couple of years ago. The faster and faster we paid off debt(CC's, cars, house, ect)the lower our score got. It didn't make sense to us until we realized the same thing @BarkingGhostar said. It sucks but that's just the way it is I guess.

 

[Exterous]

Closing your oldest cards can shorten your history and that can be a huge ding. If it was more recent, then you only have the reduced total credit limit to be concerned about.

It's unlikely to be a huge ding unless other factors are risky. (it might matter if it gets below 2 years.)

 

[DigDog]

i don't know if this is obvious to everyone but credit rating does *not* mean "how likely you are to pay back what you owe*, it means how profitable you are as a credit customer.
people who use a lot of credit are rated much higher than those who do not.
If you save all your money and never touch it you will have an average credit score.
if you take out small loans all the time and always pay them back you will have a higher credit score.
(obviously, risk is involved as well)

I had a credit limit of £10000; i took a £4000 loan. by the time i paid it back, 12 months later, my credit shot up to £20000. Same wage, same job. Same amount of savings in the bank.

 

[zinfamous]

Pay your bills. :colbert;

I can, now! After amending my fed return yesterday, I'm getting another ~2x worth of stimulus of your money! Thanks, feds! (and highland).

Haven't submitted my state amendment, yet, but that looks like an additional 0.8x worth of stimulus from some eastern shore fishermen's money!

 

[BarkingGhostar]

These stimulus should have been in the form of EBT. But that's just my jealous opinion.

 

[Scarpozzi]

Unless you're taking out a loan or wanting to open another credit card, what difference does it make?

Credit scores only matter to what us ATOT 1%ers call "poories".