Closing those credit card accounts

**Saccharomyces** · 08-31-2010, 10:07 PM

Dave says to close credit card accounts after you pay them, but the only reason I have heard for doing so is to prevent identity theft which I don't find very compelling. I know I'm not supposed to care about FICO, but it seems like closing accounts unnecessarily torpedoes it which could hurt you if you ever want to get a mortgage to buy a house (which Dave allows under certain conditions, of course).

I'm thinking of not closing the accounts. Talk me down. (The cards have been cut up for some time)

**mateosbaby** · 08-31-2010, 10:45 PM

We kept only one, but then, we only had 3 to begin with. We do have a Kohl's charge card that we use to get the discounts, then pay it off same day (usually while we're still at the checkout counter). We did cancel them as we paid them off. If you're paying them off in quick succession, I can see it being a problem. But if you're paying them off with a few months in between, that shouldn't affect it, really.

**Palooka** · 09-01-2010, 12:16 AM

I've closed a few through the years after paying them off. Checked my credit score not that long ago and it's great.

I'm one that cares about a high FICO and probably always will.

If you are looking at buying a house, and you already cut them up....then I would keep them open. IMHO.

**Greebo** · 09-01-2010, 08:44 AM

Closing the credit accounts is not just done because of the possibility of ID Theft.

You are making a commitment to not use debt anymore - closing the accounts removes temptation.

It will lower your score a tad - but anything over a 725 is going to get you the best rate possible anyway for a mortgage.

And oh yeah - you shouldn't be buying a house until you're completely out of non-mortgage debt anyway and until you have a 3-6 month emergency fund built up. Once you have that, if you have problems getting a "Fico" mortgage, go to a bank that does *REAL* underwriting and let them look at your financial picture and you'll have no problems.

**craftypam** · 09-01-2010, 08:51 AM

Originally Posted by Palooka

I've closed a few through the years after paying them off. Checked my credit score not that long ago and it's great.

I'm one that cares about a high FICO and probably always will.

If you are looking at buying a house, and you already cut them up....then I would keep them open. IMHO.

Totally agree with you about closing accounts and I too will always care about my FICO score and do not care what "Dave" says about it.

**frugalwarrior2** · 09-01-2010, 08:54 AM

They want to see that you can behave yourself w/ open credit and not use it. I always wait 4 months before I close it once it's paid off.

**Greebo** · 09-01-2010, 09:13 AM

I remind everyone that this *particular* sub forum is the Dave Ramsey subforum. You're all free to care about your FICO scores, but in this forum, we should try to keep our answers in line with what Dave teaches.

**gmarie** · 09-01-2010, 06:55 PM

Originally Posted by Saccharomyces

Dave says to close credit card accounts after you pay them, but the only reason I have heard for doing so is to prevent identity theft which I don't find very compelling. I know I'm not supposed to care about FICO, but it seems like closing accounts unnecessarily torpedoes it which could hurt you if you ever want to get a mortgage to buy a house (which Dave allows under certain conditions, of course).

I'm thinking of not closing the accounts. Talk me down. (The cards have been cut up for some time)

I've been debating this as well. I have not closed any of them yet - and just paid off the CC I've had the longest, and I'm scared to close it because I'm not sure if it closing it will also affect the length of my credit history.

I know this not in line with DR's advice, but one of my goals is to buy a house in the next three years, and therefore my FICO score IS important. But, of course I do plan on putting 20% down on a 15 year mortgage!

But feel free to tell me I'm wrong. I'm wrong about many things! :-)

**Greebo** · 09-02-2010, 09:34 AM

gmarie: What's your current credit score?

**gmarie** · 09-02-2010, 11:42 AM

Originally Posted by Greebo

gmarie: What's your current credit score?

It was around 650. (I canceled my credit monitoring service a few months ago to save money)

The "factors" most affecting my score (according to Equifax) are length of credit history, late payments over 5 years ago, and of course using WAY too much of my available credit!

I'm curious to see how much the score has gone up over the last few months, but I've decided that I will not check it!

I really just want to avoid doing the things that I know will hurt our chances of buying a house later.

I do plan on closing a few of the accounts, just not ALL of them.

**Momto5RN** · 09-02-2010, 11:51 AM

heres a story for you - we had a mc in my dhs name
we got a letter from bank of america saing they were closing the acct saying that it was for one of these reasons.

going over limit
paying late
or paying less then the minimum

it was an acct we paid off 3 years ago that i though we had closed but we cant find a letter to prove it but now in our credit report it shows up as they closed it on us as if we were a poor risk .

i even argued with them well its been at 0 for a few years so how did we go over the limit - pay late or how do we pay more than ) a month if we owe nothing . they just gibe stupid answers

**craftypam** · 09-02-2010, 11:54 AM

This is the frugal village; not the dave ramsey forum. Everyone talks about ways to save money in here that has nothing to do with dave ramsey. Not caring about fico score is NOT frugal!! Interest rates on home loans will be higher and car insurance will be higher w/o a good credit score.

**Greebo** · 09-02-2010, 12:01 PM

Originally Posted by craftypam

This is the frugal village; not the dave ramsey forum. Everyone talks about ways to save money in here that has nothing to do with dave ramsey. Not caring about fico score is NOT frugal!! Interest rates on home loans will be higher and car insurance will be higher w/o a good credit score.

No.

THIS SUBFORUM is the Dave Ramsey sub-forum of Frugal Village.

See?

**Momto5RN** · 09-02-2010, 12:10 PM

one thing i try to keep track of etc is when i use the new posts way of reading forums i check the forum category when i click on it - just like this is the DR discussiion area so i expect to see answers in accordance with DR even if i may not 100% agree with it - dont post that part LOL

IE i am sure singles dont care how i bulk cook for 7 of us when they are specifically asking about bulk cooking meals for 1. so if i noite a question comes from that area i may read but i usually dont responce ( and sometimes i dont even read )

one of the quirks of using the new post button to see whats new.

**gmarie** · 09-02-2010, 12:16 PM

Originally Posted by Momto5RN

heres a story for you - we had a mc in my dhs name
we got a letter from bank of america saing they were closing the acct saying that it was for one of these reasons.

going over limit
paying late
or paying less then the minimum

it was an acct we paid off 3 years ago that i though we had closed but we cant find a letter to prove it but now in our credit report it shows up as they closed it on us as if we were a poor risk .

i even argued with them well its been at 0 for a few years so how did we go over the limit - pay late or how do we pay more than ) a month if we owe nothing . they just gibe stupid answers

Yikes, that is one thing I do worry about!