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If I cancel seldom used credit cards, will this have an adverse effect on my credit rating?

Q: If I cancel seldom used credit cards, will this have an adverse effect on my credit rating?

A: It may have some effect, since it does cause a reduction in the total amount of potential credit you can borrow, while increasing your utilization ratio (the percent of your total available credit you are actively using) which are factors which go into your credit score. In general, it is probably a good idea to close out little or unused accounts over time, but you should not do so before you plan to do any new borrowing for any major purchases. Unless your credit is a mess, it is usually better to leave your credit profile undisturbed as you prepare to buy a home, a car or take on any new significant debt.


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Keith Gumbinger
Keith Gumbinger
Mortgage Expert
Vice President, HSH.com
About Keith: Mortgage market observer and analyst with 35 years experience... (more)
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