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Closing a new credit card account

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garcia.carlos86

Joined: 05 Oct 2007
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Posts: 1

162 Magic Points

Subject: Closing a new credit card account

Fri Oct 05, 2007 12:26 am

I recently just opened a new credit card account. I have not received my new card in the mail yet and I am already deciding that i want to close the account. Will closing this account hurt my score?

Laura

Joined: 21 Jun 2007
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Posts: 1407

34560 Magic Points

Fri Oct 05, 2007 6:09 am

Hi Garcia,

Closing down your account might hurt your score. However you can go for it if you have an existing good score. Around 20 points drop might happen to your score if you close down an account.
_________________
Regards,
Laura.

sdchargers_63

Joined: 13 Aug 2007
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Posts: 915

2963 Magic Points

Subject: credit card

Fri Oct 05, 2007 4:37 pm

I'm very curoius...can you tell me what can of credit card you applied for?

goodnatured

Joined: 03 Nov 2007
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Posts: 3172

1091 Magic Points

Sat Nov 03, 2007 11:50 am

Can you guys explain why closing it would drop a credit score that much? I am curious as to why it would drop it at all, I am new to credit rebuilding and have alot to learn. thanks for your insight.

dwarfess

Joined: 05 Oct 2007
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Posts: 13

1125 Magic Points

Subject: Closing a new credit card account

Sat Nov 03, 2007 8:15 pm

Score should only drop if you close an old account. For new accounts, closing them before actually using them should have no impact. Be sure to send letter CMRR. Letter should read something like the following:

Your Name
Address
City, State, Zip

Date

Credit Card Company
Address
City, State, Zip

Certified Mail# xxxx xxxx xxxx xxxx xxxx – Return Receipt

RE: Account #: xxxxxxxxxxxxxxxx

To Whom It May Concern:

Please close the above referenced account effective immediately. My records indicate the above account has never been activated. Therefore, this account cannot and has not ever been used and has a “zero” balance.

Please send me written confirmation that this account has been closed and the date the account was closed. Also, include proof that you've complied with section 623(a)(4) of the Fair Credit Reporting Act by reporting this account as "closed by consumer" to the national credit bureaus.

Please also be advised that I wish to communicate solely in writing. I can be contacted at the address listed above. Do not call me at any time or place.

I have sent this letter certified mail/return receipt to ensure that you receive this letter.

Sincerely,
Your Name

goodnatured

Joined: 03 Nov 2007
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Posts: 3172

1091 Magic Points

Sun Nov 04, 2007 12:42 am

You would think if you did not use it and you close it they would have no activity to report. This is very odd to me that it would have any affect at all. I have never done this, I was always foolish and used the cards. I don't have any today, I paid two past ones off this year and working on the last one currently. I don't think I will ever apply for another card as long as I live. My bad experience has been my own fault, but I don't need the temptation.

debtstinker

Joined: 03 Nov 2007
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Posts: 303

115 Magic Points

Sun Nov 04, 2007 12:56 am

I have closed new accounts before, never thinking it would impact my credit. Gosh in college I didn't even apply for cards and I got them in the mail, some of them i activated and used, some of them i didn't activate at all and shredded them, then some I activated then never used and canceled. I wouldn't think this would have little if any affect on credit score. very interesting how this all works. Dwarfess, thanks so much for that letter!

goodnatured

Joined: 03 Nov 2007
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Posts: 3172

1091 Magic Points

Sun Nov 04, 2007 1:05 am

debtstinker, I found it odd that it would affect it at all if you didn't use it and cancelled out. I thought alot of cards have a time frame where you can cancel without any hassle but never thought it would be credit reporting issue at all.

debtstinker

Joined: 03 Nov 2007
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Posts: 303

115 Magic Points

Sun Nov 04, 2007 11:17 am

Yeah I thought so too good...they usually do give you a short time frame to cancel after activation and like so many have said it should not affect your credit if you never used it. the only thing i can think of is that when you activate your card, you're allowing your report to know that you have more available credit to use. kinda wish someone who works for a cc company could shed some light. i mean there are so many college kids who just get cards in the mail without ever signing up for them. at least that was my experience about 10 years ago. shoot, and this is no joke, we got a credit card in my dogs name and NEVER applied. i think the credit card companies have a tighter grip now who they allow to have them. bizarre! i guess its a blessing that with my low credit score i can't have many cards. i only have two and my available balances shot up an amazing amount after i proved that i was credit worthy and paid off the balances in full for 6 months. ironically i just applied for a card and was turned down. so you just never know how they work. i'm just glad ihave the 2 for emergencies and such. i never go beyond the 50% mark of my available balance as that can hurt your credit and try to pay them in full every month.

goodnatured

Joined: 03 Nov 2007
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Posts: 3172

1091 Magic Points

Sun Nov 04, 2007 12:42 pm

I haven't had a credit card in years, don't plan on ever getting another one. This issue just really surprised me. I would not have given it a second thought if I was going to get a card.

debtstinker

Joined: 03 Nov 2007
debtstinker's page
Posts: 303

115 Magic Points

Sun Nov 04, 2007 9:45 pm

Yeah credit can be very tricky...good for you for not having that plastic...for our family it's a necessary evil, we really try to only use it for groceries which we pay off as soon as hubby gets paid, and emergencies. we don't use it for retail use at all. we just had to plop down $1000 to fix our jeep because it didn't pass pa inspection. if it weren't for my credit card (hubby's doesn't have enough credit) then we couldn't have paid for our jeep. so they're good and bad

goodnatured

Joined: 03 Nov 2007
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Posts: 3172

1091 Magic Points

Mon Nov 05, 2007 12:19 am

I know what you are saying good and bad, see I am not disciplined enough to let a card sit idol, I would be buying something and then be irritated when a month went by and it wasn't paid off. Sorry to hear you had to shell out that much to get your jeep fixed, that is another necessary evil, car repairs, car insurance, gas for the car, etc, etc, etc.

We don't have public transportation living in the sticks so I know what you are talking about. I could never live in the city anyway. I went to town today to buy the kid some much needed winter clothes, all those people drove me insane, after about an hour I had enough. I got alot of good deals, she is ready for winter.

Laura

Joined: 21 Jun 2007
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Posts: 1407

34560 Magic Points

Mon Nov 05, 2007 4:58 am

Quote:

i'm just glad ihave the 2 for emergencies and such. i never go beyond the 50% mark of my available balance as that can hurt your credit and try to pay them in full every month.

Try to keep the balance at a 25% level. That really helps.

Actually your credit history adds to 15% of your total credit score. So closing an account shortens your history as well. If you have an old account paid in full let it stay because that will prove to be a good one for your report. If you have a closed account with derogatories then its wise to keep disputing it because it adds to your discredit.

Try not to apply for too many cards at the same time. That has a real negative impact on your score.
_________________
Regards,
Laura.

goodnatured

Joined: 03 Nov 2007
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Posts: 3172

1091 Magic Points

Mon Nov 05, 2007 11:48 am

good advice, I knew too many credit inquiries can drop your score, Laura, do you know if the when the derogatory ones fall off it raises your score, but what happens when the positives drop off, does your score go down?

dwarfess

Joined: 05 Oct 2007
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Posts: 13

1125 Magic Points

Subject: Closing a new credit card account

Mon Nov 05, 2007 4:01 pm

The reason to close new, unused and/or inactive credit cards is that although there is no activity, the credit is still available to you to use whenever you choose. Thus, not only are inactivated cc's included in determining your credit score, but also the number of open accounts (inactive cc's are considered open).

A prospective creditor could deny your application because the sum total of all of your credit limits (this is your available credit) is too high. What that point is, is a mystery . . . my score took a hit (815 to 796) when I went over 60k in available credit even though I have no lates (ever), and the sum total of all my debts is less than 5% of my available credit and .

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