Should I close my store credit cards to raise my credit score?
Answers
2775 points
Oldman answered 2 months ago …
If you've paid balances promptly, and haven't late charges on those cards, their credit history is very valuable. If you haven't used the credit lines, ever, then closing a few won't affect your score much. The bulk, majority of a credit score, is the portion of credit available (say$12000) on all credit, and the payments on a credit balance of 30% or less of the available lines (say $3500 owed). So not using a credit line doesn't help...but having a lot of credit lines does hurt...because...at any moment you could max out the credit lines.
The history of your payments and any late charges remains for years.
You can get free reports, from each of the major credit reporting agencies, once a year at annualcreditreports.com...which isn't the exact address, but doesn't sell you anything or charge
a fee...but,
any of the reports may have incorrect info. and you still have to contact that creditor, directly, to have the info corrected...the credit reporting agency can't change a listing of a defunct credit card from Macy's from 10 years ago, that never was used, for example.
You have to write to the card issuer, and use a certified, return receipt mailing, and save a copy of the correspondence, to be sure the credit line is removed...and that takes months.
To summarize: Your credit score is affected by the amount you might charge, the amounts you have charged, and the payment record.
In addition, mortgage and Home Equity Lines of Credit are also included, as are unpaid balances on any outstanding Student loans, etc.
904 points
jillybeansisme answered 2 months ago …
You can get your credit report from each of the main 3 once per year directly from them, or if you've been denied credit. Anything on your credit report usually is removed after 10 years, unless it is still active and then it's just the beginning date of the history of that credit item not what went on 10 years ago. If you have many unused store cards, close 1 or 2 every 6 months. Try to NEVER use a store card without paying off the entire balance the next month because store cards carry an outrageously high interest rate (should be called loan sharking!). If you have revolving credit cards (Visa, MC, etc.) and several have no balance and aren't being used, then close one every 6 months until you are down to two. Keep one for monthly expenses (the one that gives you cash back!) that you pretty much pay off each month and the other for long term balances, if you have to carry a balance for a few months (emergency purchases such as water heater blew, funeral, etc.)
Even if you close a few cards, the credit history will be valuable. If your credit reports have misinformation, you can write the credit reporting bureau and it will be posted to your account that there is a dispute (also write the company whose entry you are disputing). Oldman is correct in stating that your outstanding debt to credit available should not be more than 35% or it will affect your score.
