Closing Credit Accounts

Unfortunately, there is always advice going around that may not be the best in your personal situation. Or advice that is out of date.  In most cases, it is not a good idea to close any credit card accounts. A big portion of your credit scores are based on your credit history. When you close a credit card account, you cut yourself off from that history.

The credit scoring models look at it as though you believe that you can’t handle having all those accounts open. The urge to ‘Charge! Charge! Charge!’ is more than you can handle so you must close the accounts. While this works for me as far as keeping cookies in the house, it doesn’t work for your credit cards.

Unless you are closing that account to keep a mean and vengeful “ex” from charging up the accounts again; hang on to those credit cards!

I want you to become devoted to those charge cards! Grow old with them! If they are more than five to seven years old, they may not contain a clause called Universal Default. This paragraph will switch you to the very highest rate on your credit card if you are late on any account.

A common thread with those consumers with credit scores over 800 is that they all have credit card accounts that are over 25 years old. Wisely using those old-time credit card accounts over the years will build your credit score significantly.