How Canceling Credit Cards Can Affect Your Credit Score

Some credit restoration companies may encourage participants to cancel their credit

cards immediately, the fact of the matter is that doing so can negatively affect your credit score. Just about any credit repair program worth your time will know this, and help you navigate through the complex systems.

People looking to go through the credit restoration process should know that canceling cards may temporarily drop your overall FICO credit scores, but over time that number should go back up. Here is why:

* The length of your active accounts will be cut down. Having a couple of credit cards that have been in good standing for years can help boost your score. Cancel them, and you cancel out some of your positive credit history.

* Your overall credit limits will go down and that can be a bad thing for your credit score. On the other hand, by having lower limits, youll be less likely to get in over your head in debt something that can save you a lot of time dealing with credit repair programs.

* The type of credit you use will be less diverse. Cutting down on your revolving credit may be a good idea for long-term credit restoration, but in the short term it hurts your score.

In short, there are benefits and drawbacks to pretty much any decision you make dealing with credit. The key is to make sure you make the best decisions possible for your future; thinking long-term is going to benefit you much more than focusing on the short term.

If youre not sure what to do, get in touch with a credit repair program or talk to a credit restoration expert. Make sure you choose a company or individual who knows what they are talking about and has good references, and youll come out on top.

by: Mick Bernard

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