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Author Topic: Credit Question  (Read 910 times)
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Eel Snave
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« on: January 14, 2009, 12:16:51 AM »

Okay, so we took out a line of credit at Best Buy to get a TV, and then we decided not to get the TV.  Is it better for our credit rating to close the card, or to leave it open?
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StormHarbinger
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« Reply #1 on: January 14, 2009, 12:27:04 AM »

For the most part, keep it open. Cut up the card if you must, but part of the way your credit score is calculated is based on your available credit, so a drop in your available credit (by closing an existing line, for example) could cause a drop in your score.
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coopasonic
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« Reply #2 on: January 14, 2009, 01:00:46 AM »

Actually a credit line showing no activity is pretty neutral on your credit report. Depending on how much available credit you have and what your credit looks like otherwise, lots of available credit can appears to be opportunity to get in over your head. On the other hand having availble credit lowers your utilization percentage, which is good. It's way too complicated to worry about, let's just call it neutral.

Btw, I build credit scoring systems for a living.
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Laner
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« Reply #3 on: January 14, 2009, 01:52:50 AM »

Close it.
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Kevin Grey
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« Reply #4 on: January 14, 2009, 02:26:02 AM »

I'd leave it open but just not use it. 
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Tebunker
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« Reply #5 on: January 14, 2009, 02:29:20 AM »

with best buy they will close it on their own after 18 months or so of no activity, so you don't have to do it yourself if you don't want and it may be handy to use in the near future.
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CeeKay
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« Reply #6 on: January 14, 2009, 02:43:42 AM »

you could always send it to me  icon_biggrin
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ericb
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« Reply #7 on: January 14, 2009, 03:03:54 AM »

Keep it open unless you already have a very good debt-income ratio.  You have already taken a slight hit getting it in the first place...no reason to make it worse.
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Crux
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« Reply #8 on: January 14, 2009, 03:44:48 AM »

Store credit cards are considered sub-par lines of credit in comparison with major credit cards when it comes to calculating your credit score.
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Mookee
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« Reply #9 on: January 14, 2009, 05:18:36 AM »

Quote from: Crux on January 14, 2009, 03:44:48 AM

Store credit cards are considered sub-par lines of credit in comparison with major credit cards when it comes to calculating your credit score.

Really? I would doubt that. Actually, I think it could probably be illegal for them to judge on the type of credit card. Mix of credit types is of course considered (mortgage vs. credit card vs. car loan, etc).

Do you have a link? I'm curious.
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Scuzz
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« Reply #10 on: January 14, 2009, 07:21:10 PM »

I have been told that closing a credit account is a bad thing. But it would depend on your current credit record. If you don't have much, leave it open, cut up the card if you want but leave the account active.
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drifter
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« Reply #11 on: January 14, 2009, 09:50:23 PM »

having a credit card available to you is also looked at by some places as potential debt as you can charge up to the limit.  You can leave it open and if you plan on doing something where your overall debt is reviewed, (like buy a home) you can always have it closed out.
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Crux
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« Reply #12 on: January 14, 2009, 10:26:20 PM »

Quote from: Mookee on January 14, 2009, 05:18:36 AM

Quote from: Crux on January 14, 2009, 03:44:48 AM

Store credit cards are considered sub-par lines of credit in comparison with major credit cards when it comes to calculating your credit score.

Really? I would doubt that. Actually, I think it could probably be illegal for them to judge on the type of credit card. Mix of credit types is of course considered (mortgage vs. credit card vs. car loan, etc).

Do you have a link? I'm curious.

I only have my own credit score and the explanation of things affecting it. Store credit cards were explicitly listed as a factor.
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