You should close the accounts you don't use. Having too much avaliable credit (especially if you have any debt) looks awful on a credit report.

I would suggest you look into what the limit of your cc acounts are. If each one is 5000 and you have 3 open, even if your are not using them it looks bad that you have 15000 of possible debt at your finger tips.

If you feel better having extra credit avaliable it is better to call the long standing acounts ask for a limit increase and then get rid of a card in it's place. The newer ones (depending on how new) will do this as well if they have been open for at least a year. If you haven't used them in a while you may be denied the increase.

Boy, that's a tough call. I don't cancel any of my credit cards. And like you, I've always heard about the debt to avail credit ratio. How many credit cards do you actually have? I have 6 and 3 with balances and a 780 FICO.

How about asking the experts here:

Here is a link that might be useful: Credit

I don't recall ever reading of closing CC accounts to improve one's score.

Exactly what did it say?

The link below lists the many things that determine a score, and the number or amounts of available credit is not listed.

Sue

Here is a link that might be useful: Whats In Your FICO® Score

And there are more good tips at the link below.

Here is a quote that may apply.

Amounts Owed Tips

* Keep balances low on credit cards and other "revolving credit".
High outstanding debt can affect a credit score.
* Pay off debt rather than moving it around.
The most effective way to improve your credit score in this area is by paying down your revolving credit. In fact, owing the same amount but having fewer open accounts may lower your score.
* Don't close unused credit cards as a short-term strategy to raise your score.
* Don't open a number of new credit cards that you don't need, just to increase your available credit.
This approach could backfire and actually lower your credit score.

Length of Credit History Tips

* If you have been managing credit for a short time, don't open a lot of new accounts too rapidly.
New accounts will lower your average account age, which will have a larger effect on your score if you don't have a lot of other credit information. Also, rapid account buildup can look risky if you are a new credit user.

Hope it helps.

Here is a link that might be useful: Improving Your FICO® Credit Score

Being landlords, we check credit reports often. We would not rent to someone who has a lot of accounts open and a ton of avaliable credit (which would also depend on the income) in conjuction with debt on revolving accounts.

We have seen many reports that say "too many open accounts". If there is no revolving debt it isn't that big of a deal, because most of the time people are just not aware of the store account they opened 10 years ago for the discount. It does affect your score though.

My Fico is 847. I have never had to up my score intentionally so I am probably not the most qualified to tell someone how to up their fico.

we had several cards which we did not use, had no balances on them and were just sitting there. I was advised to close the accounts, but to make sure that the phrase "closed at customers request" was added to each account on the credit report. This i did (there were five cards) and it didn't appear to hurt our credit score of fico rating (just under 800). The main reason i closed the accounts was because out of the blue i received a credit card statement with charges for a flight from Ireland to Italy ($700) and hotel charges of $15,000). I had not used this card for more than three years!! Just made me realize have vulnerable we had become. Needless to say the credit card company were informed of the fraudulent use of the card and once it had been sorted out, then i went through and closed the rest of the accounts.

Good question. Normally I use a long time Discover and alternate with a MC. But periodically I can't resist opening the 10% off if you open a cc acct especially when I'm buying a lot that day (doesn't happen that often) such as when buying appliances for a new house at Sears.
How does this affect your cc rating if you open, pay off, wait a year, think dang I don't need this anymore, close it. Move a few years later and do it again?

Great question!

I called up a CC company to close an account that I'd had for 15 years but had not used in about 5 years. They convinced me to lower the credit limit to $1,000.

This, they argued, would be more positive to my credit score than closing the long-term and paid-off account.

So might the OP do better by having the banks lower the credit limits on these cards (noting that it is by customer's request) than by closing a bunch of them?

"This, they argued, would be more positive to my credit score than closing the long-term and paid-off account."

I am just wondering if you have considered your source. I don't think I would trust the opinion of a CC company that doesn't want to lose an account. Do you really think they are looking out for your best intrest? Not judgeing just really wondering.

Do you really think they are looking out for your best intrest?
I do think they were looking out for themselves first, but I also think they were correct in what they said. Keeping the card open would be a positive thing, considering it was older account.

Sue

Here is a link I found that asks this question directly. I'll do more research and see what else comes up.

Here is a link that might be useful: Closing accounts to manage credit score

The credit report says "Too many open accounts", as 'househunting' has stated. (well something like that)

I have about 7 open, 3 with balances.
I don't remember my fico - at least 760 but under 800.

Thx for all the info here. I haven't read it ALL yet, but I will certainly look into reducing cr limits rather than closing...altho, there is one I know I can close. The 'average' history time is something to keep in mind.

My credit report looks really messy and confused. I've found that ONE of my cc accounts 'appears' on report like 3 or 5 times! So, it looks like I have more than I actually do. This is due to banks/financial mergers/buyouts, and the company changing the cc accounts #'s for one reason or another.

For example: I had cc 'A' several years back which I had used and paid off. Then another company took over bank "A" - The company sent a new card with new company name on it. which is now cc 'B'. (cc 'A' is no longer valid)
Then company "B" upgrades my account after some time, sending me a new card with new acc't # (cc "C" - "to REPLACE existing card". (I never used bank "B" or "C" cards.)
Another company takes over company "B", sends me new card with *their* name. Now I have cc "D". After awhile, company "upgrades" my account, "to replace existing card". Now I have cc "E"...which I have used.

So, my credit report reflects 5 cc's, but in reality only ONE cc has ever been valid. It's not like I 'applied' for all these. They just kept sending them automatically to REPLACE another.

This also happened recently with a major bank cc...I had had the same acct # for over 25 years, and suddenly they sent a cc with a new acc't #. When I called about this, they said they were changing ALL customers' account #'s.

SO, my credit report reflects TWO accounts, when the card is actually the same. (And it really IS the same. I can call and enter my OLD acc't # and the same exact info is reflected...such as balance, pymt rec'd, etc. Well, I paid that one off Nov...so I don't know now.

For two cards and two accounts, my report LOOKS like I have/had SEVEN different accounts. (Which I DID, but, not really....does that make sense?)

OK, now I'm really mad since I've written this out LOL! It never occured to me how updated/replacement cc's could mess up one's cr report!

I wouldn't be able to rent from 'househunting', because it appears worse than it really is! HA!

OK, then I have another problem with old Dept Store CC's showing up...The stores have merged or no longer exist, yet they are still on report. (An example would be *like* Robinson's/May...I had a Robinson's card, and I had a MayCo card. I only used them each once for work gift exchange!, and I've never had a 'Robinson's/May' card.)
I haven't used many store cards for at least 15 years! I have used Penney's and Mervyns', but closed those out years ago (when I found out they also accept visa/mc)

Guess it's going to take a lot...

This is an interesting question for me. We applied for a home equity loan over the summer. Naturally, they pulled our credit reports and I was shocked that mine wasn't spotless. I pay my balances off in full EVERY statement. I've never "bounced" a check. I've never been late on an installment loan payment; in fact, every one was paid in full before the term of the loan was reached.

BUT, there was a notation about "changeing" credit card companies... I've never done that, either. BUT, the companies that originally issued my credit card to me have been "spun off", sold, and reabsorbed several times in the past 25 yrs.. Seems that the most recent sale was reflected on my credit score or, I'm simply a "deadbeat" because I pay in full every month.

I have several credit cards that I never use any more because I don't live near the stores through which they were issued, or the gas station in question isn't on a convenient and regularly travelled route for me. But I certainly never thought of cancelling the cards... if you never use the card how will it readily show up on your credit report?

I think the whole FICO thing is a total load of BS, anyway. One more way for some clown to skim some more money along the way and one more foolish detail that can get screwed up (and has to be "checked"!) by people like me who know how to handle their money and live comfortably BELOW their means. Scoff!

"I have about 7 open, 3 with balances.
I don't remember my fico - at least 760 but under 800."

Cathie
I wouldn't be worried with a credit score of at least 760 your fine. As they say anything over 720 is just bragging rights. Now had you said I have 20 open accounts it would be a different story.

A portion of your credit score is based on the ratio of balances to available credit.
By closing a couple of the accounts could affect this ratio and lower your score.
Yes credit reports are "messy" but anyone in the credit industry reviewing them will be able to sort it all out.
Last activity dates are something we look at.

As far as the "opening an account to save the 10%"
Every time you apply for credit the "hard inquiry" stays on your report for 2 years. This will lower your score by a few points but for only the first year.
I tell folks I work with that if you are planning any major purchase (house or car) with in the coming year stop applying for any kind of credit.

Lets say for example that your credit score is 700 which will have you in one "credit tier" and you can't resist saving that 10% which may be $100. The inquiry and new account drops your score by 5 points, now you have a credit score of 695 all of a sudden you are in a lower "credit tier" which could result in a higher interest rate. This will cost you more than the $100 you saved.

Also my biggest "tip" is if you haven't gotten you free credit report this should be one of your New Years resolutions.
There are many sites that claim they are free well as long as you join their programs.
This is the free report site we have used
https://www.annualcreditreport.com/cra/index.jsp
You can pay the few dollars to get your score but only do this if you are going to be doing a car or home purchase or if you need a baseline because you have never gotten your score. It will give you the chance to "shop" for rates instead of having everyone pull your credit.

Also by reviewing your report you can address any errors that have been reported.

Hi Cathie,

The credit report says "Too many open accounts", as 'househunting' has stated. (well something like that)
I have about 7 open, 3 with balances.
I don't remember my fico - at least 760 but under 800.

Understand this;
THe scoring algorithms are programmed such they *MUST* list 4 'reason codes' in order of their scoring importance for each of the three scores. Even if God himself, with immaculate credit, had a credit report pulled, he would get FOUR reason codes explaining "the reasons why his score is less than it could be."

The important thing to grok from this is that once you are above a certain level (basically 720-730) the reason codes are, for all intents & purposes, meaningless GIGO.

For the most part, once you hit the low-to-mid 700's, the only way to intentionally raise your scores higher is simply to leave all aspects in their perfect ratios, and then simply let the calendar pages flutter past. HISTORY is the final scoring factor frontier... the passing of time while you remain "in perfect balance."

In my 10+ years of credit review, analysis & coaching to improve, I have yet to see anyone (absolutely anyone) who's scores and reason codes actually showed that closing open accounts would actually make a positive scoring difference. (That *may* be one of YOUR reason codes... but it is likely #3 or #4 of your four total, and even if it were in a higher significant position, it would make next to zero difference to getting your results higher anyway.)

Just keep doing what you are already doing, and find a different hobby to keep yourself occupied. Stressing about scores that are already north of 720 is a complete waste of good worrying ;~)

Happy New Year 2008!!!
Dave Donhoff
Strategic Equity & Mortgage Planner

I just paid off my last outstanding balance. But I also just realized I have open credit cards (Visa x 2, Discover, Mastercard) with a combined limit of $56,000. Glad gambling isn't my thing.

Hi Dave --

Thanks for your great peace-of-mind post! I always appreciate your insights.