credit card termination

Submitted by sunil on Mon, 08/17/2009 - 15:13

I had a countrywide credit card which was closed I have been told this would not affect my score. is that right?

It depends on how many cards you have and how high the limit was. Need more information to tell for sure. If you only have 1 or 2 cards, it will hurt your score because there aren't enough cards left to back your payment history.

Mon, 08/17/2009 - 17:10 Permalink

Too much credit can also be a bad thing. If it was not your oldest credit card and you have others in good standing it should not effect your score. Did they give you a reason as to why it was closed? There is a lot of that going on with the economy.

Mon, 08/17/2009 - 23:48 Permalink

That is a tough question. Closing it in itself will not do anything to your credit, but if the account had a long history of good payment history and also a low utilization, then that might hurt your credit. If the account had a bad history or was new, then it will not hurt you to have it closed.

As you are inquiring about credit scores let me give you some information on how it is calculated. It is important to understand how your credit score is calculated. Your credit rating is calculated based on several variables, including:

1) Payment history, which counts for approximately 35% of your score, is the most heavily weighted factor used in calculating your credit score. Consistently paying your bills on time has a positive influence on your score, while late or missed payments will hurt you in this area.

2) Total debt and total available credit, which counts for about 30%. This section looks at how much debt you have compared to the total available credit on your accounts.

3) Length of positive credit history, which counts for about 15%. The longer you maintain accounts in good standing, the better your score will be. This shows that you are able to make a long-term commitment to a creditor and are consistently responsible about making your payments.

4) Mix of types of credit, which counts for approximately 10%. Having several different types of credit, such a credit cards, consumer loans, and secured debt, will have a positive influence on your credit score.

5) The number of new credit applications you have recently completed, which accounts for about 10% of your score.

Sun, 10/04/2009 - 18:08 Permalink