Cancelled Cards = Loss of Credit Score??

Paulcmitchell

I hold a Barclaycard and recentley called them to close my account. I was informed by the operative on the other end of the telephone that as an excellent customer of 5 years, I would loose all the great credit I had built up. He suggested that I lower my credit limit to a nomial amountand keep the card just to keep my status. Is there any truth in this? Your comments would be most welcome. Paul

mhendo

They tried the same nonsense with me too when I asked to cancel. I would think it is in fact worse to keep open unused accounts - if you keep opening more and more accounts, and never cancelling existing ones, then your "available credit" will always increase, meaning future credit applications may result in lower and lower credit limits.

Niteflyer

Absolute !!!!!!! These people will try anything to keep you/ As mhendo says, by cancelling unused cards you are increasing the amount of credit available to you.

YorkshireBoy

We don't know if this card is the only one that the OP has though, or the reasons for wanting to close it do we?

If it is the OP's only card, then there would be some sense in keeping it going with a "reasonable" limit, spending wisely, and always paying off at the end of the month.

This would ensure that some satisfactory "account management" history is maintained, ready for the next time credit is required.

I could have misread the OP's question, but he's had the card for 5 years - which doesn't suggest he's a "seasoned rate tart" exploiting every offer going.

creditscorer_2

Quite right, YB.

The previous posters' comments aren't always right. There aren't many issuers who would care if you had 1 or 2 cards open and there's absolutely no guarantee that you'll be given the same limit by a new issuer that you would with B/C.

The agent's advice to lower the limit is a bit peculiar though - not knowing their underwriting, this would suggest that the manual increase limit would remain at the OP's current level if he or she ever wanted it back.

Think about it - if you want to BT then you need a card open to have a balance. Therefore 1 is better than 0.

cs

Paulcmitchell

Thank you all for your very thorough scrutinization. I have indeed been playing the Balance transfer game and have successfully spent 12k on redecoration and furniture without a bean of interest for the last 2 years. All of my debt is now on one card and 0% untill April, at which time I will be due my anniversary offer of 5 months 0% from Egg. I have a total of 4 cards, two of which appear to offer me little, now or in the future. Thinking I may want at least one more interest free year to pay off debt,so will be looking for a deal this time next year, so I am actively trying to preserve my credit rating. Any further advice? Cheers

YorkshireBoy

Paulcmitchell wrote:

...I am actively trying to preserve my credit rating. Any further advice?

Close all unused credit cards and ask the providers to mark them as "settled" on your CRA files. For further information, check out Martin's credit rating article here...

http://www.moneysavingexpert.com/cgi-bin/viewnews.cgi?newsid1101485056,23650,

Robert_Sterling_3

Niteflyer wrote:

Absolute !!!!!!! These people will try anything to keep you/ As mhendo says, by cancelling unused cards you are increasing the amount of credit available to you.

I disagree.

Reaper

I have heard before that some companies like to see long term associations on your credit report. However I don't know how much importance is attached to it. I suspect having a long term bank account and being at the same address for a few years is more beneficial.

Being a serial stoozer it is not something I bother with. My aim is always to borrow the maximum while having the least showing on my reports, so I cancel cards as soon as I have finished with them.

janeystickley

:think: This is my first time. I'm nervous.

Someone may have mentioned this before but when you close down a credit card, how soon will it appear as 'closed' on your credit report. Does anyone know?

Thanks to Martin and his advice, I have been 'rate tarting' and have so far paid off nearly £7,000 on my c/c with no interest.

grumbler

janeystickley wrote:

:think: ...when you close down a credit card, how soon will it appear as 'closed' on your credit report...

Must be very soon. If it is not shown as 'settled' (Experian) in a month contact CC provider. For Equifax this should be 'End **/**/200*' line.