I Have a Credit Card I've Never Activated - Does it Affect My Credit?

Unless it just arrived, it probably does. Many credit card issuers begin reporting new accounts within 2 months of issuance, whether or not the card has been activated. Thus, if you want to close the account, you should do so as soon as you receive the card.

The application itself is probably already showing on your credit report by the time you receive the card, and it will remain there for 2 years. It will, however, only be factored into your credit score for one year.

Orchard Credit Card Sign In

The actual formula used by Fair Issac to determine your score is not public knowledge, but we do know a few things: It's good to have a lot more credit available than the amount of credit you're actually using. Credit inquiries made as part of a credit application lower your score - especially if they are numerous. Too much new credit is probably not a good thing for your credit score. Closing an account you've had for years damages your score because one factor that raises it is the existence of seasoned accounts. Closed accounts stay on your report for up to 10 years.

Every credit account you own will show up on your credit report - either as active or as closed. It will also show if the account is in good standing and if it was in good standing when it was closed.

Why would you want to cancel a card you just received? Because it may be a different card than the one you asked for. If you applied for a card at 7.9% and received one carrying a rate of 17.9% instead, you probably don't want to use it unless you're sure you can pay the balance in full each month.

Card issuers are now routinely lowering credit lines, raising interest rates, and canceling unused accounts - even for their best customers. This practice is having a negative on FICO scores across the board because one factor in the credit scoring formula is the ratio of debt to available credit.

Thus, if you have a "seasoned" card - one you've used for many years, you probably shouldn't cancel it even if you don't intend to use it. In fact, you should use it occasionally in an effort to keep the issuer from closing it.

What if you get a card you didn't ask for?

That shouldn't happen. If it does, contact the issuer and cancel it, and then order a copy of your credit report immediately. That card could be a red flag indicating identity theft.

The best protection is to enroll in a service that will alert you any time there's activity affecting your credit report.

I Have a Credit Card I've Never Activated - Does it Affect My Credit?