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New Credit Cards and Your Credit Score

It’s better to leave a card inactive than cancel it

En español | Q. What happens to my credit score if I cancel a credit card I never activated?

A. Even if a card hasn’t been activated, your credit score will take a short-term hit.

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Here’s why. Activated or not, the financial institution that issued the card will have reported it as an open account to the big credit bureaus, says Anthony Sprauve of FICO, the company that develops the widely used credit scoring system of that name.

If you cancel the card, you’ll lose its available credit line.  Any balances you have on other cards will suddenly loom larger as a percentage of your total credit availability on those other cards. That will tend to lower your credit score — about one-third of a score is determined by your balances-to-credit limits ratio.

Says Sprauve: “It’s better to let a card sit there inactive than actually close the account.”

In general, you should avoid opening credit accounts unnecessarily. And that includes agreeing to get a store-branded credit card for a one-day discount. Even if the plastic isn’t physically issued that day, that account is considered open the moment you agree to the account, whether or not you later call the toll-free number to activate the card.

A final thing to consider: How did you get this plastic that you never activated? If it arrived unsolicited, it might indicate identity theft. So immediately check your credit report.

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