I was looking for something to share today and nothing was really hitting the spot, till I came across this article titled Spring Cleaning: How to handle unused credit cards. I admit that there was a period in my life, my younger days, when I applied for all the “pretty” credit cards. No plain blue or green MasterCard of Visa for me. Lets get one with flowers or Mickey Mouse on them. I had an obnoxious amount of credit cards close to 30 I believe. I needed to spring clean them for sure!
A major portion of your FICO credit scores (Experian, TransUnion, and Equifax) is comprised of your average account history. Most consumers with excellent scores average 20 years on their credit accounts! When you cancel credit cards, even unused accounts, you effectively erase the length of payment and account history from your FICO credit scores. This will substantially hurt your financial profile.
….. You might have a gone a little credit crazy when you were younger and opened up store accounts that you didn’t need. Now you’re stuck with an account from a store you no longer shop at, and have your eye on a shiny new retail card from your favorite store. Unfortunately, this is one mistake that does not get better with time. If you open that shiny new store account, your total credit history length is significantly shortened — the same applies if you close that old credit account. So, stick with your bad decision and keep the account current and in good standing. Your credit score will thank you.
Make sure you read the rest of the article to find out how to clean the dust build up in your wallet around your credit cards while still maintaining a great FICO credit score.
Let us know how you handled spring cleaning and your finances.