Reader Question on Unused Credit Accounts
First off, I don’t give out financial advice because I’m not an advisor. If you need that, ask someone who is certified and pledges to do business ethically. I’m not that person. I’m here to *entertain* you.
That being said, someone asked this question:
I did recently check my credit report and found that I have five credit cards open that I have not or never used in several years. Does keeping them open, albeit unused, help or hurt my credit score? Would you suggest that I close the accounts if I never intend to use them?
I think you’re best off reading about FICO or Vantage credit scoring models. There is some benefit to having revolving credit accounts open for a long time. Now the question is do you have too many open that hurts your score in another way? That’s up to you to decide. I mean you could go ahead and close them but that could also lower your score in the short-term, but in the long-term that could be beneficial if someone is looking at your ability to get in revolving debt overnight and evaluating you as a credit risk in 2 years down the road.
Does monitoring these unused accounts put an undue burden on you? Closing them could ease your mind.
A strategy you might want to try is to get a credit score report and then close one account and get your credit score again afterwards. Because so much goes into scoring though, so you’ll have to control the experiment by making sure your payments are on time during that time period and watch to see if your balances cross the 35% of available credit on that account. (Up or down. Either one will trigger a score change.)
The biggest score impacting item is on-time payment. Just make sure that you vigilantly pay on-time for a minimum of 24 months. Small open accounts may represent only annoyance and possible security risk without a lot of other score downsides, so it’s up to you if you want to keep them open.
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