 TITLE: Should You Cancel Unused Credit Cards or Keep Them? CONTENT: How Canceling Your Unused Credit Card Impacts Credit\n----------------------------------------------------\nIt might sound counterintuitive to keep a credit card account open if you're not using it. That's especially true if you believe closing an account will keep you from overspending—which is a sound impulse. But closing a credit card could negatively affect your credit score. Here's how:\n*   **Increased credit utilization**: Your credit utilization rate is the amount of revolving debt you currently have compared to your total credit limit. The lower the rate, the better. That shows lenders you're not maxing out your cards, and you can be trusted to use credit responsibly if they extend it to you.\nGetting rid of a credit account affects the amount of credit you have available. For instance, if you have a credit card with a $2,000 credit line and another with a $3,000 credit line, your total available credit is $5,000. If you currently have $1,000 in debt between the two cards, your credit utilization rate is 20%.\nSay your $1,000 balance is on the card with the higher credit limit, and you decide to close the other. When you close the card with a $2,000 credit line, your available credit decreases to $3,000 total. With $1,000 in credit card debt, your utilization rate jumps to about 33%. Credit utilization accounts for 30% of your FICO® Score☉ , the most common score used by lenders, so this change can have a significant impact on your score.\nExperts recommend keeping your credit utilization below 30% at all times, and the closer to zero, the better. Assess how closing an account would affect your credit utilization before doing so.\n*   **Decreased average age of accounts**: A less weighty factor in your credit score is your length of credit history, or how long you've been actively using credit. This accounts for 15% of your FICO® Score. Closing a credit card account—especially the oldest one—reduces the average age of your accounts.\nIn our example above, let's say you've had the card with the $2,000 limit for eight years and the one with the $3,000 limit for two years. Closing the card with the $2,000 limit means your only open credit card account would be two years old. Other accounts, such as student loans and auto loans, would still be factored in to the average age. But keeping your oldest account open is generally your best bet so you don't drastically, and inadvertently, shorten the length of your credit history. END