12 Jan My credit card was canceled! Does this affect my credit score?
Due to the tightening economy, credit card companies are looking more closely at the accounts they hold. Many are lowering available credit limits and/or closing accounts. If you haven’t used your credit card in a while, it is likely the creditor will close your account because credit card companies lose money on dormant accounts.
Closing credit card accounts does have an affect on credit scores. The length of time an account has been open is the third most heavily weighed factor in your credit (FICO) score (after timeliness of payments and the amount you owe). Closing an account also reduces your available credit which could lower your score.
If your credit score is not so good (700 or lower), it is a good idea to make sure your oldest accounts stay active. Use your card at least once every three or four months, but make sure you pay it off each month so that you do not incur those high rates of interest.
Latest posts by Jay Fleischman, Esq. (see all)
- 5 Things You Need To Know About Bankruptcy Exemptions Before Your Case Is Filed - August 28, 2013
- Beware Of This Person When Trying To Wipe Out A Second Mortgage In Chapter 13 - August 26, 2013
- Our Best Tips For Filing For Bankruptcy Without Your Spouse - August 22, 2013
- 5 Ways To Celebrate Financial Literacy Month - March 31, 2013
- Burning Money With Handcuffs On - March 21, 2013