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You may have heard that one of the basic elements that is considered in the calculation of your credit scores is the period of time you have had an account - be it a credit card , mortgage, car loan, or retail account. Furthermore, the act of closing one credit card account and opening another can move your accounts down. What if you lose your card and have to get a new account number to prevent unauthorized use? Relax. The components involved in closing a credit card account and opening a new one do not affect your credit scores as it will not be treated as a new account. Additionally, your credit card issuer will move all of your data from the old account to the new one. The new account will hold the exact-same opening date, the rate of interest, credit limit, and payment record. When your credit card issuer reports the change to the credit organization they may or may not show a closed account and a new account. Alternatively, they may just describe this modification in account numbers. Closing an account to change to a different kind of account can decrease your scores. You may want a credit line increase, or you may want to switch over from a traditional card to a rewards credit card. Or, you may feel it is time to shift from a student credit card to a standard card or rewards card. By doing so, you can decrease your credit scores. Instead of closing the account that has previous history, consider maintaining it and creating an application for a second card. This is considered a good choice if you want a rewards credit card for you to use with the intention of incorporating complete payment each month - for example, to charge car fuel for which you will be re-paid by your employer. By keeping your rewards credit card charges separate from a card that includes a balance, and reimbursing it complete each month, you will be exempt from paying any interest on these charges.
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