Does cancelling a CC affect my credit rating?

davidla

Hi

Just had a letter from HSBC saying that as I haven't used my credit card in the past 12 months they will cancel the card in 30 days unless I advise them otherwise. I am quite happy for them to cancel it, but...
if they cancel it will it affect my credit rating in a negative way? (I have no debts on the credit card.)

Thanks!

exel1966

davidla wrote: »

Hi

if they cancel it will it affect my credit rating in a negative way? (I have no debts on the credit card.)

Thanks!

Generally no, but it's not as clear cut as it seems ! Whether you cancel or they cancel makes no difference in this case.

It's unwise not to have any form of credit so if you have other cards/finance then it may actually improve your rating as you'll have less available credit.
If you don't have any other form of credit then you should keep it and use it at least once per month to show that you can manage credit which also enhances your rating.

NickX

Overall I think the answer is NO, it shouldn't cause you a problem.

The settled account will provide evidence of a successfully well run account.

Its worth keeping a handful of cards active though so as to keep an ongoing credit history.

davidla

Sorry - should have mentioned that I do have other credit cards, one of which is used reasonably regularly. So I will let HSBC cancel it.

Thanks for the advice.