Credit Report & Closed Accounts

[twins0203]

I have some questions regarding your credit report that has closed accounts, either closed from not being used, or consolidating credit lines.

I have recently done the BT 0% 'game' and just wanting to plan out the rest of the year to make my 2nd one much better.

For example:

Lets say I have a Citi Platinum card before doing the BT game. I sign up for the Driver's Edge card and the Simplicity card. At the end of the year, I consolidate all three cards into the Citi Platinum to not only give me a much much higher credit line on it, but to allow me to resign-up for the Driver's Edge and the Simplicity card at the first of the following year.

My question is will the first round of Driver's Edge and Simplicity cards show as "Closed by customer" on my credit report. If so, how will that effect me in the future if I resign up for both the same cards that I have now "closed." Is it viewed negatively? If so, is it possible to remove them since they were in 100% good standing their entire account life?

[sweeps]

twins: I did something similar once, and yes, your merged cards are shown closed by customer. You'll probably take a negative hit on your credit report for closing accounts -- assuming the average age of your accounts goes down. But since you plan on merging the credit lines, your debt ratio should be unchanged.

Of course, your mileage may vary. I've read some stories about how the CC company have messed these things up before. In one case, the person had several hard pulls charged to them. In another case, the company did not allow the credit lines to be merged, so the person's debt ratio skyrocketed when the other cards were closed.

[debtfreeme]

they will only show closed by customer if you request of your card company to close them that way in the letter you submit. otherwise they can mark any code they want and often just mark account closed or account closed by card company which does not look at good on yur record.

be carful to makr sure that your debt ratio on the card you transfer it all to does not go above 50% otherwise you willnot get the good offers out there for cards with 0% etc.

[Ima saver]

I have about a dozen credit cards that I do not use. When I had a cc balance I was transferring all over the place to get the 0% interest. Now I owe nothing, but I am afraid to close them, so I just let them sit. Is that wise or not?

[sweeps]

Personally I think having 12 credit cards is excessive and you should close about half of them, if for no other reason than to protect yourself from fraud and ID theft.

But I assume the FICO gods would strike me down for suggesting that.

[debtfreeme]

If you close them slowly you should not see that jump in your creidt score. Close one every couple of months and see what happens. make sure that they mark them closed at consumers request.

[Lostsoul33]

I have maybe 6 cards sitting here with no balance. I never closed them because everyone says that you shouldn't. So..I've never really known what to do with them. They are hidden in the house but if someone ever found them....they would have a hayday.

[debtfreeme]

we can have the credit card hunt at your house this year!

[akaivyleaf]

Lostsoul33, I would destroy the cards. If you ever needed them, you can request another card.

Sharon

[flash]

To Ima, Lost Soul,

There is a balance in maintaining accounts WRT credit scores. If you have old, unused open accounts, especially with department stores, etc., after they have been unused for a certain time (DH is the expert on this), they are considered a risk because of the risk of ID theft and fraud. Old unused accounts are much more likely to go unnoticed if there is a problem.

So, they can indeed reduce your credit score. Exactly when they cross over from being a benefit to a risk, not sure. Again, that's my DH expertise, and he is the one who keeps our FICOs so high.

[flash]

Originally Posted by twins0203

I have some questions regarding your credit report that has closed accounts, either closed from not being used, or consolidating credit lines.

I have recently done the BT 0% 'game' and just wanting to plan out the rest of the year to make my 2nd one much better.

For example:

Lets say I have a Citi Platinum card before doing the BT game. I sign up for the Driver's Edge card and the Simplicity card. At the end of the year, I consolidate all three cards into the Citi Platinum to not only give me a much much higher credit line on it, but to allow me to resign-up for the Driver's Edge and the Simplicity card at the first of the following year.

My question is will the first round of Driver's Edge and Simplicity cards show as "Closed by customer" on my credit report. If so, how will that effect me in the future if I resign up for both the same cards that I have now "closed." Is it viewed negatively? If so, is it possible to remove them since they were in 100% good standing their entire account life?

Just another quick note: the rules for credit cards and creditors reporting have changed dramatically this year, so be careful. AMEX and I think Citi will only allow one new card every six months, and they do count closures against you. The rules for what they can report to the credit bureau and how they can impact your other cc's have also changed. Not sure this applies to you, but be careful.

[kristinecfp]

I saw a good article on this topic on Kiplinger's website today. Here's the link:

http://www.kiplinger.com/personalfin...03/credit.html

Best,
Kristine McKinley