Will cancelling unused credit cards increase my credit score?

I have several credit cards that I have not used in months. There is a 0 balance on the accounts. If I cancel them.. will this increase my credit score or make it worse? I also have a card that was recently issued to me with a credit limit significantly lower than what I expected. I have not used the card. Should I cancel it? Will this help or hurt me? Any advise on how to consolidate debt and increase my credit rating would be greatly appreciated.

Public Comments

1. Cancelling a lot of credit cards at once makes your score look bad. But getting rid of extra cards is a good idea in the long run. Cancel the most recent ones first and continue to use the cards that you are keeping so that your credit does not stall. As long as you don't have to apply for new credit soon, you will have enough time to increase your score from cancelling accounts.
2. The longer you have a credit card, the better it is for your credit score. Also, if there are zero balances, that raises the amount of "free credit" you have, which is also a good thing for your score. Check out www.bankrate.com.
3. Closing an account even when it is by your own choice never looks that good. The best thing to do with these unused cards is to use them for everyday expenses, and set the cash a sides. Then when the bill comes pay them off each month. This will increase your score.
4. No, absolutely not! Don't cancel your unused cards. That's how credit cards companies get you. To tell you the truth it will lower your credit score (FICO score) drastically and ruin your good credit. This is something credit card companies don't tell you. You could put them aside in a safe place for when you might need them or just cut them up and discard of them safely.
5. Cancelling credit cards, especially if you have had them for extended periods, can adversely affect your score. Credit rating is based on a multitude of things, Debt to Credit ratio (How much of your available credit you have used), Number of late payments, Length of credit account agreements, and so on. Responsible use of credit actually looks better than having only enough to cover what you currently owe. For example, and this is just numbers I'm throwing out for ease of understanding, You currently have 5 credit cards, 2 of which you have a balance and 3 you do not. The 2 you have balances on have a total limit of $5,000 and you owe a total of 4500. Debt ratio is 90% on your two cards alone, but you have an additional $5,000 available on your 3 cards with no balance. This makes your debt ratio 45%. This doesn't take in to account what you might owe on other loans like auto, mortgage, signature, but it gives you an idea. You want to keep a comfortable amount of available credit open to keep your rating good or improve it and pay everything on time. Now, since you have cards you don't use and do not have a balance, here's my opinion on how to deal with them. First determine how much total credit limit is of all your cards. See what the available credit would be if you cancelled the other 3, 2 of 3, 1 of 3, and see what looks best. If you can cancel one or more with retaining a comfortable amount of available credit use the following to determine which should go first: 1 - How long has each account been open 2 - What is the interest rate. 3 - What is the credit line on the cards. Figure out which are the best, longest established and lowest rates are most important, then the credit line in my opinion. Get rid of the card or cards with the worst deals. You may also consider reviewing the cards you have a balance on and if they have higher rates or lower limits you could move balances and keep better cards if the ones with balances are not as good. You may even get benefit of some balance transfer deals. Lastly, still looking to improve on your credit, consider using one of your cards with no balance to pay for everyday things like fuel, groceries, other items you buy often and paying it off each month. This shows activity and good credit usage. If you have a rewards card if could even net you a few bucks extra a year. Just remember that it takes discipline to do this without thinking "oh, I have money now I didn't have before so I can by other stuff I normally wouldn't" becuase that will cause you to have a balance you can't pay off before you know it. That's probably way more than you wanted to hear but hopefully it helps.