By financen | May 24, 2010 - 5:43 pm - Posted in Credit, Credit Card, Credit Score

It is really a question that many of us have in our mind. You should not have unused credit cards in your wallet if your primary goal is to maintain good credit score. But in case of emergencies, that extra card may come to you as a real help.

Unless you extra credit card causing problems like annual fee or inactivity fee – there is no such a great reason to close the account. “A zero balance on a credit card account won’t hurt your FICO score, but closing an account could”, says Craig Watts, a spokesman for Fair Isaac.

However the bank may cancel your credit card if your credit card remains unused for many days. The reason is “eventually the card issuer will close the account due to inactivity,” says Watts, as keeping the unused credit card account open costs the lender money.
If you are to apply for a loan then you should consider this quotation given by Rod Griffin, the director of public education for credit bureau Experian, “Closing an account causes you to lose the available credit limit associated with it. Your utilization rate, also called your balance-to-limit ratio, will increase as a result of closing the account. That may cause a temporary decline in your credit scores.”

Watts says, “The FICO score assesses all the information on your credit report. So the score impact from any one action, such as closing an account, will depend on what other information is present on the credit report”. He also says “closing one card is much less likely to affect your FICO score”.

If you are responsible enough borrower then an account closure would not have much impact. As good credit involve not to carry excessive debt and making payments on time.