Think twice about cancelling an old credit card

If an individual has not used a credit card in a some time, instead relying on other sources of funds for payments, they might think about cancelling the old line of credit. This is especially true of individuals who might have a habit of overspending and dragging down their credit score - if the temptation's not there, there won't be a problem.

However, according to The Street, this action has the potential to do more harm than good. The source specified that if an individual cancels a card that is all paid off and never used, it can cause some positive instances of repayment to be taken out of one's credit history, which affects consumers' scores.

If the individual paid off old cards on time, it may be best to keep the line of credit open simply so that these examples remain as part of the credit report.

If there is no other option and the card must be canceled, consumers can use a Payment Reporting Builds Credit score to prove reliability instead. These individuals can contact a local credit bureau about establishing this score and simply have to provide access to utilities accounts that show a positive history of repayment.