If you don't pay your CC balance in full every month, you deserve what you get. You bent over for them.
That doesn't make sense. Hey they got your money too (TARP), even if you pay your balance off every month. The way I see it, shouldn't we be finding a way to take advantage of this situation just like they did? This isn't some gayassed chest pounding thread for people to brag about how they are so rich they pay off their cards every month or whatever, etc or make up false credit scores to sound cool. I know what my score is and I keep a small balance on my card simply because it was the first card I got years ago when I was 19. Helps build my score (since it's an old trade line and it's considered paying as agreed) and keeps them from closing from inactivity. I would just enjoy discussing this scenario with others who think it's totally fucked that people like us who were responsible are getting totally ass-raped by not only the TARP but increasing interest rates, etc even though banks get free money.
My question is this - does it affect your credit score/credit rating to cancel credit cards? If so, should you try to cancel newer cards first and retain the ones you've had for years? I thought that FICO score was determined in part by looking at the ratio of available credit/debt.
FICO also takes into account the average age of your trade lines. Closing accounts can potentially screw your score up, depending on the age of the account being closed. That's a big one. And also, as you mentioned, it can negatively affect your balance/available credit ratio.
so when you apply for a credit card they generally look at your Equifax score rather than the other 2? I thought they looked at all 3 and averaged them.
It depends, but usually for unsecured credit lines they check Equifax to my knowledge. It may vary depending on the bank, but most do use Equifax vs the other two. Mortgages, they will check all 3 and average them aka Median Score.
I was wondering about this but am not too concerned, I had two CC companies close my accounts due to inactivity in the last month. I would have closed them long ago but was told not to, as this would effect my credit rating. Looks like either way, there is going to be some consequences.
nutmeg, where you putting some small purchases on the cards once in awhile, or were just not using them at all?
It may not end up being that big a deal...it depends on how it will affect the average age of all your accounts. As an example, If you've opened 3 or 4 new credit lines in the past couple years and the only older lines you had were those cards...then it will screw with your average and your CBR might take a hit...but as long as it's not going to drastically affect your average account age, you should be good to go. The main thing that gets people is having opened too many accounts within a 12-24 month period. That's one reason you may have heard the advice about not opening any new loans or credit cards for at least 12 months prior to getting a mortgage. Each bank is different and FICO doesn't disclose exactly how they weight everything (the stuff they post about their formula is BS for the most part). Each bank looks for different things, they don't necessarily go exactly by your score. Some are more strict than others. Oftentimes your rate can still be negotiated down even if having your old credit cards closed dinged your score.