How Big a Hit Does a Credit Rating Take

November 15, 2017, 09:15 AM

BurtonRW

How much would it affect the average age of all of your open lines of credit?

If you use a credit monitoring service (i.e., Credit Karma, etc.), many of them provide a "credit score simulator" which can provide that kind of information in theory, but I've never been convinced that those are that accurate.

-Rob

November 15, 2017, 09:20 AM

TXJIM

Don't be a slave to the number. Do what makes sense personally and the rest will take care of itself. Pay your bills on time, don't carry balances close to the limit and use credit responsibly. Monitoring slight fluctuations in your credit score is pointless.

November 15, 2017, 09:21 AM

nhtagmember

its my second oldest card, has a $13k limit - the lowest of all my cards

November 15, 2017, 09:25 AM

Black92LX

Why cancel??
Just don't use it unless there is a fee.

————————————————
The world's not perfect, but it's not that bad.
If we got each other, and that's all we have.
I will be your brother, and I'll hold your hand.
You should know I'll be there for you!

November 15, 2017, 09:25 AM

nhtagmember

not a slave to the number - I have an excellent score - just want to reduce my cards as I no longer need them

two years ago just before I bought my house in AZ I closed out an AMEX Gold card I'd had for years - and it raised an eyebrow with the lender...

November 15, 2017, 09:26 AM

nhtagmember

pretty much getting rid of it to eliminate the fee and the volumes of junk mail every week - offers for this and that...

November 15, 2017, 09:30 AM

Strambo

Do you even need to buy anything big on credit in the near future? If not, it won't matter at all. Could even help your score a little depending on their algorithms.

November 15, 2017, 09:37 AM

TXJIM

quote:
Originally posted by nhtagmember:
not a slave to the number - I have an excellent score - just want to reduce my cards as I no longer need them

two years ago just before I bought my house in AZ I closed out an AMEX Gold card I'd had for years - and it raised an eyebrow with the lender...

That is the only time to worry about such things. If you are making a big purchase on credit soon then do nothing. If you have no mortgage plans in the next few months it's meaningless. Trim away, simplify, it won't effect you in the least going forward.

November 15, 2017, 09:39 AM

nhtagmember

sweet - thanks for all the advice

going to kill it off today

November 15, 2017, 09:43 AM

blueye

I just use 2 cards now, AMEX and a Visa. Had others that I did not use and let the card companies cancel them for no activity. Do not know if it made a dent in my credit score but it did not prevent me from a lease for a car earlier this year and the finance guy said I had excellent credit.

November 15, 2017, 09:45 AM

rocket72

quote:
Originally posted by nhtagmember:
pretty much getting rid of it to eliminate the fee and the volumes of junk mail every week - offers for this and that...

yeah that's probably not going to stop the offers and junk mail. If I were you I'd probably keep it. The hardest time to get credit is when you need it. Gold Amex I can see killing off with that annual fee though.

November 15, 2017, 09:49 AM

smlsig

I agree with the heard. Go ahead and cancel it and you'll be fine in the long run.

One of the many black box algorithms is the ratio of actual debt to your credit limit and the length of each of those lines of credit.

Several years ago I trimmed my cards down to just one for my personal use and one for my company. My credit scores hovers around 830 and has been there for years...

November 15, 2017, 09:51 AM

smlsig

For those of you who don't know what your credit score is I highly recommend you sign up with Credit Karma.
https://www.creditkarma.com/

It's free and looking at it doesn't affect your score...

November 15, 2017, 10:39 AM

BurtonRW

quote:
Originally posted by nhtagmember:
pretty much getting rid of it to eliminate the fee and the volumes of junk mail every week - offers for this and that...

What makes you think the junk mail will stop?

-Rob

November 15, 2017, 10:45 AM

grumpy1

I reduced my CC limit from 25K to 10K and my credit score went down a bit and stayed down a bit because my CC utilization percent went higher but I pay my CC off every month and have for decades LOL. I did that after my CC got hacked. I only had a couple hundred $ in bogus charges but it still motivated me to reduce limit.

November 15, 2017, 10:53 AM

straightshooter01

quote:
Originally posted by smlsig:
One of the many black box algorithms is the ratio of actual debt to your credit limit and the length of each of those lines of credit.

This is an important part of the puzzle. If you cancel the card it will affect two parts of the calculation. It will affect the average age of your credit. This has a medium impact on the calculation of your credit score.

The second part is the percentage of credit used/credit available. This has a high impact on your score calculation. Since this is a low credit available card you might be able to offset this impact by asking your other cards to raise your credit limits by this amount before you cancel the card.

November 15, 2017, 10:59 AM

benny6

Yup, no need to keep it open unless you're purchasing a home in the next couple of months. I just bought a home this summer and avoided any adding or cancelling of credit.

Now that the purchase is over, it doesn't make a difference.

Tony.

November 15, 2017, 11:02 AM

texassierra

My score went down slightly when I paid off my house. Go figure!

November 15, 2017, 11:05 AM

TXJIM

quote:
Originally posted by straightshooter01:
quote:
Originally posted by smlsig:
One of the many black box algorithms is the ratio of actual debt to your credit limit and the length of each of those lines of credit.

This is an important part of the puzzle. If you cancel the card it will affect two parts of the calculation. It will affect the average age of your credit. This has a medium impact on the calculation of your credit score.

The second part is the percentage of credit used/credit available. This has a high impact on your score calculation. Since this is a low credit available card you might be able to offset this impact by asking your other cards to raise your credit limits by this amount before you cancel the card.

I will say it again, don't be a slave to some stupid number. Make smart financial decisions over the long run and pay your bills. When you want to buy something big the lenders will recognize that. Not to mention, anything over 740 with good debt to income ratio will give you the top tier rates in any scenario.