A common mistake made by individuals who what to increase their credit scores is to cancel credit cards that are either not in use or have an high annual fee. The problem is this…closing credit cards can lower your credit scores, instead of raising it.
Your current and past credit history – Closed accounts are also used to determine your credit scores. Even though this account is closed, it contains information on how you have paid this bill in the past as well as its age. If you have been late in the past, this will be considered in the credit score, but so will paying on time. This closed account is no longer considered active and is not evaluated for current payments, only historical.
There’s a better way – If you don't want to use the card or cards any longer then that’s fine. My advice is to remove any cards you don't want to use from your wallet. If you owe money on any, pay them off as soon as possible. If you don't owe anything on them, use them at least once every 90 days for a very small charge. Make sure you pay them in full when the bill arrives.
Your current and past credit history – Closed accounts are also used to determine your credit scores. Even though this account is closed, it contains information on how you have paid this bill in the past as well as its age. If you have been late in the past, this will be considered in the credit score, but so will paying on time. This closed account is no longer considered active and is not evaluated for current payments, only historical.
There’s a better way – If you don't want to use the card or cards any longer then that’s fine. My advice is to remove any cards you don't want to use from your wallet. If you owe money on any, pay them off as soon as possible. If you don't owe anything on them, use them at least once every 90 days for a very small charge. Make sure you pay them in full when the bill arrives.
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