Is It Wise to Close Recently Opened Credit Cards? #CreditScope


Do you have questions about credit?

Join our live video chat every Tuesday and Thursday at 2:30 p.m. ET on Periscope. Rod Griffin, Director of Public Education at Experian, is available to answer your questions live.

Here are some of the key questions Rod addressed in today’s scope:

Is it wise to close recently opened credit cards?
When you close an account you lose the available credit limit on that card and that will affect your utilization rate, which is simply your total card balances divided by the total of your credit limits.  When you close an account, you lose the available credit limit on that particular account. As a result, your existing balances become a higher percentage of your remaining total available credit limits.

Mathematically, this makes the utilization rate goes up, which is a sign of credit risk.  In most cases however, after a couple of billing cycles, the score will go bounce back up if there is no other negative activity because it becomes clear you didn’t take on more debt.

How long do you pay cards consistently for it to positively affect my scores?
In order for accounts to be included in credit score calculations, you need a minimum of three months of activity reported and usually six months of reported account activity. There needs to be enough account history to be meaningful for predicting the likelihood you will repay new debts as agreed.

If my partner files Chapter 13 bankruptcy, will joint accounts included in the bankruptcy hurt my credit scores?
It should not hurt your scores because you and your spouse have separate credit reports and it’s possible for one person to declare bankruptcy and not the other. If your partner declares bankruptcy and you didn’t, the bankruptcy should not appear in your credit report.

However, in some states community property laws may mandate that your accounts be linked. If so, your spouse’s bankruptcy could affect your credit history.  Check with your state’s Attorney General’s office or your attorney to find out if community property laws apply where you live.

How long does it take your score to update after you’ve made a payment on an account?
Technically, scores don’t update. It’s the information in your credit report that is updated.  A score is not part of a credit report. Instead, scores are calculated at the moment a new credit report is requested. For example, if you apply for a loan and the lender pulls your credit report, a credit score is calculated at that time.

If you apply for another loan six months or even six minutes later, a new score is calculated at that time.  We recommended that you allow 30-45 days from the time you make a payment, dispute information or make other account changes to allow that information to be updated in your credit report by the lender. That will ensure the changes are reflected the next time a credit score is calculated.

Are you responsible for the accounts you are an authorized user on?
No, as an authorized user you are not contractually responsible for the debt on the account.  However, you do have a responsibility to the person who listed you as an authorized user.  They have allowed you the privilege of having access to that account, which will be reported on your credit report and help you build credit history.  You should take your responsibility to the primary account holder seriously. Don’t rack up charges or abuse the privilege of having access to the account, because the primary account holder will be responsible for payment of any charges you make.

Check out the scope to hear answers to all the questions asked today, and scroll down to see Rod’s responses to a few unanswered questions:

How can I bring my credit score up?
The two most important factors in credit scores are payment history and utilization. The first thing you have to do to have good scores is make all of your payments on time, every time. If you have past due accounts, work to bring them current.

The second is your utilization rate, or balance-to-limit ratio. High balances on your credit cards have a very negative impact on your credit scores. Reducing balances as compared to your credit limits will help restore your credit scores more quickly.

If you feel there is inaccurate information on your credit report, follow the instructions provided with your report to submit a dispute. You can do so online at

If you would like to speak with an Experian representative who will go over your personal credit report with you in detail, consider our Experian Credit Educator service. You can sign up online at The relatively small fee for this service may be just the investment you need to make to change your financial future.

I paid a charged off debt. How quickly are they removed from my report?
An account is charged off when a lender has determined that you will not repay the debt. When an account is charged off, it usually is sold or transferred to a collection agency. The collection agency then becomes the legal owner of the debt, and you should make any payments to it, not the original lender. The charged off account and any subsequent collection will be removed from your credit report seven years from the original delinquency date of the original debt. The original delinquency date is the date of the first missed payment that led to the account being charged off.

Can you discuss authorized users? How does this affect the primary account holder?
If you add someone as an authorized user, your account and its associated payment history will appear in their credit history, as well as yours. The authorized user will have the ability to use the account to make charges but has no responsibility for repayment of the debt. You will be accountable for repaying any charges they make.  Making someone an authorized user will help them build a positive credit history. However, if they are irresponsible with that privilege, you could be left paying for their debt.


Scoped on: 02/02/2016

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