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Does closing inactive accounts improve your credit score?

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dmdjl



Joined: 14 Jul 2008
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Posts: 1



31 Magic Points
Subject: Does closing inactive accounts improve your credit score?
 
 Posted on Mon Jul 14, 2008 1:57 pm  
I am trying to improve my credit score. I have several open accounts that I no longer use. Is it best to close these accounts with a zero balance or are there certain accounts that I should focus on?
cbass1017



Joined: 01 Feb 2008
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Posts: 143
Location: PA


1528 Magic Points
 
 Posted on Tue Jul 15, 2008 1:44 am  
Welcome to the forum!

Believe it or not dmdjl closing those unused account will actually lower your credit score a little bit. It really depends on how many accounts you have open. If you are trying to raise your credit score quickly than you should probably just leave them open. Eventually though you may want to close some of them if their not being used at all.

Best of luck in raising your credit score!
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goodnatured



Joined: 03 Nov 2007
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 Posted on Tue Jul 15, 2008 2:00 am  
Leaving them open is the best thing to do at this point, keeping them open keeps your available credit higher, which is a good thing for your score.
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anthony

anthony

Joined: 31 Jul 2006
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Posts: 516



13571 Magic Points
 
 Posted on Tue Jul 15, 2008 6:10 am  
Hi dmdjl
I agree with good natured on this point. Closing your old credit accounts will in fact reduce your credit score rather than improving it. FICO score consider the length of the credit history. So it is better to close new accounts than to close old ones.
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Anthony Marx

A positive attitude is not achieved by turning a blind eye to the negative, but rather by responding to every situation in the most positive way possible.
Mary

Mary

Joined: 06 Jul 2006
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Posts: 686



17396 Magic Points
 
 Posted on Tue Jul 15, 2008 6:26 am  
Credit history contributes about 35% of your credit score and so credit history has an important role to play in improving your credit score. If you close down your old accounts, it means you are deleting your credit history from your credit report which will in fact have a negative impact on your credit score. Moreover, if you have old credit cards which you do not use, start using them to make small payments and repay it on time. This will help you to improve your credit score.
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goodnatured



Joined: 03 Nov 2007
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Posts: 3927



10 Magic Points
 
 Posted on Wed Jul 16, 2008 3:00 pm  
Great information mary, I guess some people think that if they have them around they will use them. I guess you could keep them open, but just put them a way and not use them or make small purchases and pay it off to establish a credit history.
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anthony

anthony

Joined: 31 Jul 2006
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Posts: 516



13571 Magic Points
 
 Posted on Thu Jul 17, 2008 11:55 am  
Keeping a credit card underutilized has no effect on your credit score. So I don't think it wise to close down your credit card accounts so long as you are able to continue with your annual fees. However, making monthly basic payments like bills through cc will at least create a credit history and improve your score. But if you spend more than 30% of your limit, your credit score will fall.
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Anthony Marx

A positive attitude is not achieved by turning a blind eye to the negative, but rather by responding to every situation in the most positive way possible.

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