Closing Unused Credit Lines

I have a credit line open with a zero balance that I am not planning on using again. Should I close it?

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Bill's Answer: Answered by Mark Cappel

From my experience, I would generally say that it is better to leave an account like the one you describe open, as it has a positive payment history and it is positively affecting your debt to available credit ratio. Your total amount of outstanding debt, and how it compares to all available credit on your credit reports, exerts a strong influence on your credit score (approximately 30% of your overall credit score is based on this ratio), which is much more than open credit to income. In fact, your income does not even figure into your credit score since the bureaus do not report income information in consumer credit files, so you really do not need to worry about how your available credit compares to your income.

To read more about credit, credit reports, and credit scoring, you can visit the Credit Resources page. Your income is an important factor used by potential lenders in determining your ability to repay a loan, but it does not affect your credit score.

Since you are planning to purchase a home, I also encourage you to visit the Home Purchase page. I wish you the best of luck in finding a home and obtaining a loan, and hope that the information I have provided helps you Find. Learn. Save.



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