I have about 5 department store credit cards that I never use. If I cancel those accounts, will my score improve? Even a little? Again, these aren't credit cards. They're store cards (like Home Depot, Office Max, etc.) If I shouldn't close these accounts, then how can I improve my score? I pay off my one credit card monthly, and my other debts are a mortgage and a car payment.
I'm no expert, but my understanding is you should NOT close these cards. They are credit cards even though they've been issued by a store, and will affect your credit score. Some things that the credit score likes are
- older credit lines that have been around for awhile
- small or no balances in relation to your total credit line
Your best bet is just to cut them up and forget about them.
If you want to improve your score, NEVER miss a payment on your mortgage, your car, or your credit cards, and dispute any errors on your credit report. Do NOT request too many new credit cards (better to ask for a credit line raise on your old cards).
You will impact two factors - Average account age. If these accounts are older than your average, you are worse off. If newer, you will increase the average account age and improve your score. Credit utilization. By getting rid of available credit, any remaining balances result in higher utilization. This is counter-intuitive, but part of the stated rating calculation. I discussed the scoring process in an article Your Credit Score, in greater detail.
I added the above image in response to Patches comment. Nowhere is there a breakout of which card has what. Most of the $20K shown is a zero interest offer that was good for a year, $15K pulled at a one year cost of $50. It was used to pay against a 5% mortgage (since refinanced). The $15K is 100% of that card's line. It's only for the other available credit that my report is not dinged for utilization. Respectfully, I disagree that individual card's utilization affects the score. it's total debt out of total available lines.
Closing those accounts can have an impact on your credit score. One of the factors in calculating your credit score is the amount of credit you have already been approved for. So closing accounts you don't use will lower the amount of credit you have available. That should increase your credit some.