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Does cancelling credit card lower my credit score?
redzhell
Posts: 351 Forumite
in Credit cards
Been a fan of this site for a few months but have only had the courage to try "slow" stoozing recently.
I currently have 1 credit card and 1 store card which I always pay off in full. I have just applied for a credit card with Halifax where I could get 0% on purchases for 10 months which I'm still waiting for a decision on.
I want to "tidy up" and cancel both or at least 1 of my other cards but during my research I came across some sites saying it may not be a good idea to cancel unused credit cards as it may lower my credit score but some sites contradict this. To my confusion, I emailed Experian who I have a subscription with but they weren't very helpful.
So should I or should I not cancel my other cards?
I currently have 1 credit card and 1 store card which I always pay off in full. I have just applied for a credit card with Halifax where I could get 0% on purchases for 10 months which I'm still waiting for a decision on.
I want to "tidy up" and cancel both or at least 1 of my other cards but during my research I came across some sites saying it may not be a good idea to cancel unused credit cards as it may lower my credit score but some sites contradict this. To my confusion, I emailed Experian who I have a subscription with but they weren't very helpful.
So should I or should I not cancel my other cards?
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Comments
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Depends. There is no 'one true credit score,' since each institution works it out differently.
Generally, for the purposes of obtaining further credit with credit cards:
The higher your total credit, the lower your 'score.'
The lower the percentage of total credit available (unused), the lower your 'score.'
Note, that these are generalisations, and not every company will either (a) score this way or even (b) give undue weight to them.
Anyway, cancelling a card will reduce your total credit available (good), but may also lower the total unused credit (bad).
Which is why you're seeing the contradiction.
Since you always pay off in full, you're probably better off cancelling any you won't be using, but leave one open.
What cards are they?Conjugating the verb 'to be":
-o I am humble -o You are attention seeking -o She is Nadine Dorries0 -
but what do you mean by the bits I've highlighted? Do you mean that if you have existing cards, but don't use them, or always pay them off, you're less credit worthy?
No - the complete opposite.
You have a £20,000 limit between all your cards.
You owe £0-£2,000 = better score.
You owe £18,000-£20,000 = worse score.
If you have, say, £15,000 owing on all cards - 75% used/25% free - and you close down a card with a £4,000 limit (obviously nothing on it,) these numbers go to 94% used/6% free.
Because you are perceived to have more debt in relation to your limit, this is a 'bad thing.'Conjugating the verb 'to be":
-o I am humble -o You are attention seeking -o She is Nadine Dorries0 -
Here's my situation:
I have four credit cards - three of them are maxxed out from stoozing, however I keep my fourth card open and with a £0 balance, because if I closed it, then I would be at 95% - 100% of my credit limit on all my cards and that has to look bad from a lender's point of view, surely.
So I keep that fourth card open just to make it look like I'm not so desperate for credit. I don't know if that's the proper way to think, but that's how I look at it
You're spelling is effecting me so much. Im trying not to be phased by it but your all making me loose my mind on mass!! My head is loosing it's hair. I'm going to take myself off the electoral role like I should of done ages ago and move to the Caribean. I already brought my plane ticket, all be it a refundable 1.0 -
You're assuming that they might only look at the aggregate situation, and not on a card-by-card basis.I have four credit cards - three of them are maxxed out from stoozing, however I keep my fourth card open and with a £0 balance, because if I closed it, then I would be at 95% - 100% of my credit limit on all my cards and that has to look bad from a lender's point of view, surely.
So I keep that fourth card open just to make it look like I'm not so desperate for credit.
What if they think "this customer has already maxed out 3 cards and is about to start on a 4th"?
There's a useful article on credit scoring here...
http://www.stoozing.com/g_score.htm
...which discusses available/used credit, and their ratios with respect to optimising your situation (from a stoozing perspective) .0 -
YorkshireBoy wrote: »You're assuming that they might only look at the aggregate situation, and not on a card-by-card basis.
What if they think "this customer has already maxed out 3 cards and is about to start on a 4th"?
There's a useful article on credit scoring here...
http://www.stoozing.com/g_score.htm
...which discusses available/used credit, and their ratios with respect to optimising your situation (from a stoozing perspective) .
True, yes I am just trying to look on the positive side I suppose! 
Thanks for the link, I did read that article once before I started stoozing but I really should read it again now that I'm thinking of transferring cards.You're spelling is effecting me so much. Im trying not to be phased by it but your all making me loose my mind on mass!! My head is loosing it's hair. I'm going to take myself off the electoral role like I should of done ages ago and move to the Caribean. I already brought my plane ticket, all be it a refundable 1.0 -
Paul_Herring wrote: »
Since you always pay off in full, you're probably better off cancelling any you won't be using, but leave one open.
What cards are they?
Currently, I have an Argos card which I used to buy a video camera so I could spread the cost over 9 months without interest. I still use it occassionally but pay off in full each time.
The main card I use is the Ipoints card with Halifax which gives me points so I can swap it for vouchers etc. I don't know if applying for the new credit card that I mentioned on my original post would be declined seeing as I already have a card with Halifax?0
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