I used to have 5 credit cards in excellent standing : no late payments, credit card utilization < 10%, average age of 0.75 years, total credit line $12K, FICO credit score 725
Last month I got two offers from Discover ($1000 limit) and Priceline ($1000 limit). I accepted the two new credit cards, and guess what . . my credit score dropped to 665 !
I haven't used these new cards yet. I am thinking about cancelling them. However, I read that cancelling will decrease the score even more, because of the credit to debt ratio. But I think this does not apply to me because: 1)the credit line that the new cards gave me was only $2K; 2)and my debt to credit ratio is < 10% anyway . So , as far as I understand : my credit score dropped because of the following two reasons :
1) newly opened accounts is a bad signal for FICO (damn it!)
2) average age of all accounts dropped
So : if I cancel Discover and Priceline, this should take care of the above two issues, shouldn't it ? I want to get back to my 725 score, or at least to > 700. Will cancelling these new cards help ?