Hellobee Boards

My very basic knowledge is that the age of the accounts affect your score, as well as the ratio of balance carried to available credit. The older cards give you a long credit history (good) and more available credit bumps up your score. So I don't think having those store cards open hurts you if they are not carrying a balance. I wouldn't think you'd take a big hit to close them if you wanted to, but I wouldn't close them if they are your oldest cards.

As far as I understand, things like length of credit history with a card as well as available credit across all your credit cards are important. So I would keep them open. I think most store cards they automatically close your account if they're inactive for many years anyway.

I have also heard that having a zero balance credit card for a long time is not good either... they want to see that you are spending and able to pay off your balance. So using it for something regular (like gas or to pay a monthly bill) and paying it off each month should help your credit score as well.

I closed almost all of my store credit cards years ago, largely because I was a victim of identity theft and I didn't want old accounts out there just in case my identity was compromised again. Having "old" accounts on the books is too tempting for people to misuse by supressing statements and all that kind of shady stuff, so I'd rather take a small hit on the score over the short term.

I closed a few store cards a few years ago (because i decided the risk of identity theft was worth than the risk of slightly lowering my score) and what happened was my credit score took a very slight dip immediately after closing and then went right back up again after that (within 6 months). I'd say if you are planning on applying for a mortgage or something within the next few months, maybe wait a little, but otherwise go ahead and close them. The other advantage to closing them was they didn't count into my credit, so i was able to apply for a new (better) credit card and didn't appear to have so much credit already.

Your credit score is composed of several factors: average account age and ratio of utilized credit are among them.

By closing newer accounts, you will probably improve the average account age but your utilization ratio will go up.

I'm guessing that your score may drop a bit but will recover. I would just leave them open if it were me.

For those who would like to learn more about credit I think CreditKarma.com is an excellent resource.

Especially if you're looking to buy a home soon, I'd leave them open and then close them (if you're wanting to close them) once you're 100% done with the home buying process. Ditto to what @yoursilverlining said - we never carry a balance month to month but charge everything.

My score is high so even when we applied for a mortgage, the fact that I had recently applied for some credit (which lowered the score a bit) didn't make a difference in the rate we were offered. So, I think if you are a year away, I'd close the cards. Your score will recover. The identity theft risk isn't worth it IMO.

@Mrs. Jacks: This is how I understand it as well.

I was also told from a friend in the industry the best thing for your credit is to maintain a balance on your credit care (about 30% of your limit) for a time, and just show you can make payments. This is really hard for us since we don't use our cards much and we like to just pay off, but occiassionally we will put something largish on our lowest interest card and take a few months to make payments. We should probably do this more frequently than we do.