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Old 02-19-2009, 02:28 PM
 
36 posts, read 100,263 times
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I am preparing to purchase a house (6mos +). I don't know my exact credit score but it is good. I have two credit cards. One is paid off and I will not be using it again. Another will be paid off by the end of the week but I will continue to use and pay off monthly. Will be credit score be better if I close the inactive account or should I not touch it?
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Old 02-19-2009, 02:47 PM
 
28,461 posts, read 76,269,328 times
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While each person's credit score is individually calculated each time you do something to request new credit based on the total history of their behavior, the guiding principle is that negative changes in behavior are punished more quickly than positive changes.

If you have only two cards I would not be in a hurry to close the account...
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Old 02-19-2009, 04:21 PM
 
Location: Fort Myers Fl
2,305 posts, read 2,803,020 times
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No don't close it. Use it every so often and pay off the balance. It helps your credit to keep it.
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Old 02-19-2009, 07:58 PM
 
Location: Nashville, TN
1,177 posts, read 3,859,976 times
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Quote:
Originally Posted by thebigr View Post
No don't close it. Use it every so often and pay off the balance. It helps your credit to keep it.
This is correct advice. One of the things looked at to determine your FICO score is the amount of credit you have available on the cards and the ratio of debt to available credit on the cards. Obviously, the smaller the debt the better.
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Old 02-20-2009, 10:44 AM
 
36 posts, read 100,263 times
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Thank you all for the advice...I would have been inclined to close it and go back to cash payments as much as possible.
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Old 02-20-2009, 11:56 AM
 
Location: Houston, TX
17,031 posts, read 28,227,926 times
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I'm in the same boat, company is relocating me so a new house in order. I have a card that charges an annual fee now, I'll likely suck it up for another year then can it.
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Old 02-20-2009, 12:26 PM
 
Location: Kansas
3,855 posts, read 12,258,651 times
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I was looking at something on my credit report leading up to buying my last house. It basically said it counts against you if you have an account that has 50% of the maximum used.

OK lets say you had one (or several as in my case) that were being completely unused and then another that had more than 50% of the balance used. You could transfer half of that balance to the unused account and on paper you actually look better. Overall the percentage of the used balance of the total of your maximums stays the same but individually they are more balanced and it appears you are only using a realatively small percentage of the max.

Definitely don't close the account. An unused/underused credit line looks good. It's when you are maxed out on everythign that it looks not-so-good.
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Old 02-20-2009, 01:54 PM
 
901 posts, read 2,789,854 times
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You should never close an account unless it has an annual fee. If you only have two credit cards, you're going to want to keep them open probably forever.

If you are considering a major purchase like a house, don't guess about your credit score. Get your score from each of the credit bureaus. If it is not as high as you want, see if there are ways to raise your score. It will save you a lot of money on interest.

As someone else mentioned, it is best to keep your det to credit ratio low, way below 50%.
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Old 02-20-2009, 07:02 PM
 
Location: Not where you ever lived
11,544 posts, read 27,462,867 times
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Cut up the card. Leave the account inactive because every time you close an account it affects your FICO score. Negatively. One of the well kept secrets is the house and car payment. Make thiem one time every month.
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Old 02-20-2009, 07:04 PM
 
Location: southern california
61,306 posts, read 79,577,097 times
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yes yes yes do it yesterday. they won't like you neither will the identity thief going thru your trash can at night.
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