Comments on: Should I keep old credit cards or cancel them? http://www.e-wisdom.com/faq/credit-cards/keep-old-credit-cards-or-cancel-them/ Answers to frequently asked questions to help you save money on monthly expenses. Thu, 29 Oct 2009 17:03:15 -0500 http://wordpress.org/?v=2.8.4 hourly 1 By: Matt http://www.e-wisdom.com/faq/credit-cards/keep-old-credit-cards-or-cancel-them/comment-page-1/#comment-65 Matt Tue, 22 Sep 2009 15:38:10 +0000 http://www.e-wisdom.com/faq/?p=1603#comment-65 The answer to this question varies from situation to situation. However, what you said can be true - it may be better to keep (and not close) those credit card accounts. Here is why many experts say this: The Fair Isaac Corporation (FICO) site explains <a href="http://www.myfico.com/CreditEducation/WhatsInYourScore.aspx" target="_blank" rel="nofollow">What’s in your FICO score</a>. Scroll down to "Amounts Owed" on this page and take a look at the 4th bullet point: "Proportion of credit lines used." According to this page, part of what determines your credit score is "proportion of balances to total credit limits on certain types of revolving accounts." So, if you leave these credit card accounts open, you will have access to more credit, and will therefore be using a lower proportion of your total available credit. And using a lower proportion of your available credit can reflect positively on your credit score. Again, it is hard to answer specific questions without knowing the complete credit picture, but the above explanation should give you some insight into why many experts advise keeping (and not closing) unused credit cards and other revolving lines of credit. The answer to this question varies from situation to situation. However, what you said can be true – it may be better to keep (and not close) those credit card accounts. Here is why many experts say this:

The Fair Isaac Corporation (FICO) site explains What’s in your FICO score. Scroll down to “Amounts Owed” on this page and take a look at the 4th bullet point: “Proportion of credit lines used.” According to this page, part of what determines your credit score is “proportion of balances to total credit limits on certain types of revolving accounts.”

So, if you leave these credit card accounts open, you will have access to more credit, and will therefore be using a lower proportion of your total available credit. And using a lower proportion of your available credit can reflect positively on your credit score.

Again, it is hard to answer specific questions without knowing the complete credit picture, but the above explanation should give you some insight into why many experts advise keeping (and not closing) unused credit cards and other revolving lines of credit.

]]> By: Nancy Buckwalter http://www.e-wisdom.com/faq/credit-cards/keep-old-credit-cards-or-cancel-them/comment-page-1/#comment-61 Nancy Buckwalter Mon, 21 Sep 2009 15:01:52 +0000 http://www.e-wisdom.com/faq/?p=1603#comment-61 My husband I paid off two credit cards and one credit card loan several months ago with a low interest home equity loan to be paid off in three years. Will closing out these credit cards affect our credit scores? I remember Suze Orman once saying not to close them but I was just told that has changed and having all that line of credit available and not useing the cards could actually hurt our scores. What is the truth in this matter? Please advise us. Thank you My husband I paid off two credit cards and one credit card loan several months ago with a low interest home equity loan to be paid off in three years. Will closing out these credit cards affect our credit scores? I remember Suze Orman once saying not to close them but I was just told that has changed and having all that line of credit available and not useing the cards could actually hurt our scores. What is the truth in this matter? Please advise us. Thank you

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