Canceling a credit card?

Question

How it gonna affect my Credit,

1.If I cancel a secure credit card. I don't want to pay annual fee every

year. Once my credit got better.

2. If I cancel a regular credit card?

Does it impact in bad way to my credit? Please let me know your suggestions.

Thanks Sin

Answer 1

It depends on how long you hard the card, you should read this article about maintaining your credit score, http://www.monitorbankrates.com/how-to-b...

Answer 2

It would all depend upon your debt to credit ratio.  If it is an older account, better to keep it on your report.  If the account if fairly new, then cancel as it does not weigh much value to your score.

Older accounts count for 15% of score

New credit only counts for 10% of score.

History is 35%

and this is where the ratio of debt to credit comes in, this accounts for 30% of your score.

So first check your figures, if you cancel the card and it raises you debt ratio then don't cancel the card.

example:

total available credit $5000 amount owed $1500 (30% of credit used)

if you cancel the card and it drops your available credit to $3000, then you are now at 50% which will lower your score.

Hope this answers your question

Answer 3

If you cancel a card with a balance remaining your score could go down.

Do not cancel cards that are less than 12 months old because you will not get credit for a rated (12 months reported to a bureau) line of credit.

Regular or secured cards do not score different on a credit report. All that matters is that they are reported in the first place.

Remember that after 2 years pass with no rated lines of credit (bad or good) your credit score will go to zero.