June 9, 2005

If you have paid off a credit card, but never cancelled it and then just discarded it, into the messy drawer that most of us have at home, then you could be doing your credit scoring some damage by being so careless.

One of the main reasons that this credit card could come back to haunt you, is if you feel the time is right and you would like to buy a home. Well this credit card that though has a clear balance, is still regarded as active and will be looked upon by a mortgage lender as potential debt when you apply and can be seen as a tool that when run up, could mean that you can not afford to pay off your debts. With they’re main concerns being the mortgage that they have given you.

So if you are clearing a credit card for this reason or for just simply to be debt free or have seen a better deal on another credit card, then there is a right way to go about it, so that it wont come back to haunt you in the future.

First things first

Call the credit card issuer and have them confirm that your credit card balance is clear, once they have confirmed this the next thing to do is tell them that you wish to cancel the credit card, though be warned once you say this you will be subject to the person on the other side of the phone trying to talk you out of it, by offering you a better deal in rates and fees, just politely refuse and ask for a name or at the very least an address where you can send a letter to confirm your request.

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Secondly

Once you have done this make sure that you write that letter to the credit card issuer, making it short and sweet, requesting that you would like the account to be closed and that you would want your credit report to state that you have asked for this, giving them your name, address and account number. Once this is done send the letter by recorded or registered mail, this way there can be no excuses that the letter was never received.

When the letter is sent away, don’t expect a reply in a couple of days, as it can take 30 days for a credit card issuer to close an account. Once this is done ask for a copy of your credit report and make sure that they have complied with your wishes and it states that you requested for it to be closed and check that the credit card account as been removed from your credit report.

The thing that you should always remember is that this credit report is your history and anything that has negativity towards you will reflect badly on you, so make sure that when you receive the report that you study it and it doesn’t say that the account was closed by the creditor, as this will make it look as if you have been at fault and the credit card issuer felt that you could no longer be regarded as suitable for credit.

If this does happen, then starting from the very beginning is the best possible plan of action. Call the credit card issuer, tell them of they’re mistake and ask them to rectify it, then write another letter and include in this a copy of the original letter that you sent, just a little proof (again send it recorded or registered) and then when you receive your new credit report, check that in the same way as you did the first one.