credit cards

Closing credit card dings credit score

Here's another misconception for you: Does it impact your score any less to close a department-store card versus a bank credit card?

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No. In terms of the credit card utilization, it does not impact. My only hesitation (is) in the long run there could be a difference, and that's going back to those five areas (which make up your credit score). The credit mix (is) like 10 percent -- and that looks at the proportion of different kinds of credit. The big categories would be credit cards and mortgages and auto loans. But then within credit cards, it breaks it down into whether you have bank cards or department-store cards. If you close off all your bank cards and they get deleted from your report in a few years, and all you're left with is department-store cards, that can hurt your score a little bit. Down the road that can hurt you, but that's a very minimally weighted part of the scoring. For most people, it's not going to matter a whole lot.

But if the reverse was true and you closed all your store cards, and just had regular bank credit cards, would the impact be the same?

That would hurt you less, potentially, because the bank cards count for more than the department-store cards, all things being equal. If you have to be without one, you're better off being without the department-store cards.

For many people, a store credit card is their oldest card. If they no longer want that card, would it hurt their score to close it?

When that (the card) comes off, if that's your first card, it has your longest history. Now of course it depends again on how long you've had your other cards. If you had that one for 20 years and you've had your other ones for 18, it's not anything to be concerned with. But if you had that one for 20 and then the rest of your cards you got in the last six months, and that one comes off, that could impact you a little more.

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