Raleigh resident applied for new credit card. He changed his mind. He doesn't want new credit card – what should Daniel do? A look at his options.
Daniel showed up for work. He was obviously troubled. After the early-morning activity settled down, Linda decided to ask Daniel what was on his mind. He told her that he had applied for a new credit card. The card arrived on Saturday. He no longer wanted the card. His concern was his FICO credit scores since he wanted to buy a house soon.
Linda kept advising to cut up the card – to never use it. Was this a good choice? Grumpy Bella had an opinion. Grumpy Bella was not one to keep her opinions to herself. She joined the conversation – uninvited.
The first thing Grumpy Bella pointed out was that Daniel's credit score had already taken a hit. The credit card company checked his credit before issuing card. This cost Daniel points on his FICO credit score. Daniel can't undo this. Time reduces the damage until it disappears. Process takes one year.
Cutting up the card has no impact. It doesn't close the account. The real question focuses on whether to close the account. How to decide. Grumpy Bella wanted to know what kind of card Daniel received. FICO likes bank cards. Daniel admitted it was a bank card. So far so good.
FICO frowns on too many bank cards. Did Daniel have more than four? He had exactly four. Grumpy Bella recommended keeping the card. The added available credit increased Daniel's credit score. FICO rewards the prudent use of credit. Daniel should not let card lie dormant. To maximize his score, Daniel should use the card while minimizing balance owed. Paying it off each month is great.
Kathy Godin, Award-Winning Loan Officer and Branch Manager
Where people, not computer robots, answer the phone.
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