Posted: 7/11/2005 10:13:02 AM EDT
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I have about 5 credit cards, as well as a Home Depot card. I have not used 3 of the cards at all for quite some time. The other 2 I pay off the balance in full every month. Would I be hurting myself or my chances of getting a good mortgage rate by cancelling those 3 unused cards? |
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YES. From everyting I have heard, it can hurt you. However, if you have 30 cards that you don't use, it is best to cancel some of them. It's a balance between the credit acvailable to you, the credit you use, and your income. ETA: you should be fine with what you have. Any less may hurt you, any more may hurt you as well. |
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Ina practical sense, no. Mortgage, etc lenders look at the credit score...and why it's what it is. If they just show the cancellation of three unused cards, it wouldn't effect whether or not you get a home loan. If you want to get your credit score up? Just carry a balance. Make the payments, but carry a balance. Yes, you're throwing money away, but you'll wind up with an uber-tactical credit score. Strange, but true. |
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NO You will probably need to cancel them anyway for the mortgage. Even if there is zero balance on the card, the maximum availble balance will go against your debt ratio (what you make divided by what you owe). Additionally, don't be too concerned about "establishing credit' you already have if you have credit cards. If you have never had payment issues, your credit needs nothing. This myth of "needed debt" comes from the notion that if you have negative items on your credit report, numerous positive credit items will begin to dilute these. A mortgage looks at your credit history but is not concerned about your credit score per se (again as long as your history isn't littered with negative items and huge debt). Your down payment has alot more to do with your apporval. If you have 20% to put down as well as closing costs, you will not have a problem getting a mortgage for a house in your normal price range. |
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GW - For an authoritative answer go to Free Credit Report and get your credit report. You can get your FICO score for a small fee (about $10). It's well worth your time and money. The information they provide is valuable. Your question about unused credit cards is a common one. |
Partially depends on the age of the accounts if they are at 0 balance you might consider canceling the newer ones. |
Most are about 2 years old. |
DO NOT CLOSE THE ACCOUNTS. Closing them, at BEST, will make you look the same credit-wise. More realistically, it will hurt tremendously. +1 on going to creditboards. You have to lurk and read for a while before any of it makes sense. People who tell you to close the accounts are going by common sense. They are, unfortunantely, wrong. |
There is a magazine called "Kiplingers" - SUBSCRIBE! |
That's what my score is too - and 3 are at $0 balance, others get paid off every month in full. |
From what I understand however is the only real effect if you pay off the other two every month is Credit limit to usage ratio. Closing them will help protect against Identity theft. (Remember I have been shopping for a mortgage lately). 
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Maybe. The only way it can hurt your credit to close a credit card is if you have debt, especially on the other credit cards. If you owe $5000 and have three credit cards whose total credit line is $15,000, you have a $5000 debt to $15,000 available credit. But if you cancelled one of them and your credit line went to $10,000, you now have a $5000 debt to a $10,000 avaialble credit. You know have a higher debt to credit ratio, even though all you did was close out a card that you didn't use for the last three years. If you don't have a debt, than it won't affect you to close the extra credit cards. |
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Yes, it will hurt you. www.creditboards.com Take an hour to read up on the subject, it can only help you in the long run, I promise  Eric 
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