Should You Close Your Old Credit Accounts?

To close or not to close, that is the question. Many of us have been misled to believe that closing old and inactive credit accounts is a good thing, and will help your credit score. Before you do that, here are a couple things you must consider.

Canceling old credit accounts can lower your credit score… by making your credit history appear shorter.

Generally the older the length of your credit history, the better it is for your score, says Barry Paperno of myFICO.com.

Length of credit history accounts for 15% of your overall credit score. Here is what FICO looks for regarding length of credit history:

– How long you have had open accounts.

– How long specific types of accounts have been open

– How long those accounts have been used.

If you have to close accounts, choose newer cards with higher interest rates. And your credit score won’t go down.

Related posts:

Teach Your Kids Habits of the Rich
6 Tips for Buying a Home In Your 20s
Mistakes on Your Medical Bills?

Please share your comments and questions