Cancelling Credit Cards --> affect Credit Score/Report
 

To the Credit / Financial people here:

I have two credit cards (Visas) that I don't use. One is for backup for car rentals (LDW coverage, $8,000 limit) and one which has reduced my credit limit repeatedly ($1,500 limit).

My question is, since I don't need/want these credit cards anymore, will the cancellation of these credit cards affect my Credit Score/Report?

Thanks for your advice!

Yes it will.

You're better off to just keep them and not use them if you're concerned about your credit score.

Reducing your credit limit also dings your credit score for what ever reason. But at the same time, having too much credit (as it's a liability) can affect you negatively if you're looking at borrowing money soon so it's best to figure out what will be the larger detriment.

people say credit scores are hard to fix, but when i was in school i had the worst score possible at the time. i didnt pay my minimums on my cc's, maxed out constantly, etc...
then i got my first career job and paid stuff regularly on time, often within a few days i'd clear out my entire bill. after about a year of that i was getting approved for everything.
just my observation

I had a credit card here that I stopped using when I moved to the UK - retarded part was that I got dinged with an inactivity fee after like a year of nothing put on the card. I guess I didn't read the stupid agreement hard enough.

If you don't use the card - it's better to keep them around, put a few bucks on there, and then pay it off right away so you don't forget.

I've got an emergency card I don't use much and my regular one. I set up my kiddo's pre paid cell phone to refill on the emergency card, so it gets hit for $10/month which keeps it active and the credit card company satisfied.

lol how would not paying your minimums and maxing out give you the WORST score possible?

I guess you haven't seen worst.

^lol yeah i was kinda expecting someone to say that.
i dont really mean the "worst" score but very bad considering the types of credit i had.
main obligations were credit card and phone bill. also was regularly late on the phone bill too.
i think i once tried to up my credit by 1000 at the time and they said no.

pay off any owing amount and just leave your cards at home and never think about it..

that should help with your credit score until you ready to use it for something big..

http://www.myfico.com/images/CreditE...ebreakdown.png

the graph represents the parts that make up your credit score

cancelling credit cards will affect the 30% "amounts owed" part because cancelling a credit card affects your balance-to-limits ratio

example:
- you have 3 cards, $5000 limit each
- 2 of them you have a balance of $1000 owing each
- you cancel the one with no balance
- before you cancel, your balance-to-limit ratio is 2/15 = 0.13
- after you cancel, your balance-to-limit ratio is 1/5 = 0.20

by cancelling a card, your percentage owing got worst, thus decreasing your credit score

generally speaking, only cancel when the limit of that card is really low compared to your other ones

correct me if im wrong

There is no such thing as too much available credit. What will affect your score negatively is if you have a massive balance on that credit. Basically what dachinesedude posted on balance-to-limit ratio.

so it's okay to cancel if you don't owe anything on any of those 3 cards?

I'm wondering this also.
because if you have a $0 balance on all three cards then the ratio will be 0/15 = 0, right?

I had a TD gold no fee card that i only use for emergency, I have never used it in abt 1-2 years and they automatically cancelled it for me with no fee, that way, since the bank cancels it, it won't affect your credit

just keep it till its expiry date and then don't activate the new one when they send you...

thats what i do...ive had my visa for many years and it just sits in a drawer in my desk...i have no use for it...i know how much money i have in my bank, and its more then what my limit on my visa is, so ill just use my own money instead of using a card....

is there anyway i can check what my credit score is?

u can pay a few bucks to see it instantly or get it for free but its a PITA
http://www.transunion.ca/

I just got 300 dollars worth futureshop gift card with my visa. It's definitely worth using the visa instead of straight cash. Mote convenient as well as some credit cards offers services like travel insurance. Travel car rental insurance. Buyer protection. A year extra warranty on top of the manufacture warranty on items purchased with the card. Totally worth it
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The best way to quickly repair/strengthen your score is by having a huge credit limit, but regularly using very little (e.g. 10K limit, use $20/mth and pay it off). The credit bureaus calculate this ratio regularly to determine your credit score. I saw this on a CBC documentary several years ago.

Is this true?

would overpaying a creditcard bill help it by any chance (carrying a negative balance)?

I can say that I'm an impluse buyer that returns things a lot but i've always paid my bills on time, in full.

Will my buying then returning habit affect my credit score at all?

So, instead of starting a new thread, i just have a question.
Okay, so when i was about 18, I got a ticket for running a yellow which i never paid till recently. I also applied for about 4 credit cards hoping i would get accepted early. I don't know why I did it but i still did. Now im 19 and i applied for a TD and a Capital One Credit card. Capital one approved me for a prepaid credit building creditcard, and I am still waiting for a response from TD. Just wondering did i fuck up my credit score because of all the applying I did before 19?

is it safe to say that since i changed from visa classic, to a student and dropped my limit from 2000 to 350, but i did that when i had balance of $0, so would that effect my credit score? as Futureshop's card gave me initially 2000 limit, then a 4000 limit and i have 1600 on that.

so is it safe to say that my credit rating went up? or?(fs card has 1 year no paymentneeded/no interest)

also is there anywhere i could check my credit for free/cheap? are some websites better than others?

thanks

to my understanding.. anytime you do that... it takes a hit on your score.. correct me if i'm wrong.
reason i say that is because ii've had an instance where i tried upping my credit limit by like 1000, and because i had too much available credit already (2 cards) that was turned down. i then asked how about 500. and the person i was talking to advised that i try another time because repeated attempts take a hit on your credit.