How will opening and closing a credit card affect my score?
My wife and I opened a credit card at Toys r Us to get an additional 15% off our order. Once it comes in, we plan on paying the entire bill and then calling to cancel the credit card. How will this affect our score versus leaving the card open and not using it?
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Comment by I gotz that wicked clown love
leaving it open and not using it will increase your credit to debt ratio and after a cpl of months will improve your score.
Posted on August 15, 2010 at 7:30 am
Comment by Fred F
It will drop if you close it.
Posted on August 15, 2010 at 7:33 am
Comment by Anjell
As always initial credit applications decrease your score 5-10 points depending on the bureau. This is meant as a deterrent for application-happy people. It’s honourable of you to just pay the card off and close it. The thing is once you have that credit line it will be used to calculate your credit score, closing the card will make that number fall because the line isn’t available for calculation. It’ll take longer for your score to recoup the 5-10 points than it did to lose them. A better idea is to just pay the balance and not use the card. Just tuck it away somewhere safe and because there’s no annual fee (check for inactive fees) there’s no cost to you. If need be, just use it sparingly to buy stuff for your kid(s) to keep the card active.
Posted on August 15, 2010 at 8:28 am
Comment by Max
You can use this credit monitoring service to pre-estimate future scores for different scenarios of such payments – credit-report-free.totalh.com
Posted on August 15, 2010 at 8:37 am