Best Answer: Canceling credit cards actually does the opposite effect; it will actually decrease your credit score. Parts of a credit score include length of history and overall amount of credit available compared to the amount of credit used. If you close accounts, it will severely shorten the overall length of your credit history. It'll also look like you have more debt than you should. If you have say about $25,000 in total for a limit now, with only using $5,000 - it doesn't seem like much. But if you cancel cards, your total limit will decrease, let's say to $15,000 compared with $5,000- which makes lenders think you are using too much credit.
Canceling cards doesn't increase your credit score.
1. Determine if you will use the cards in the future. If not, pay off the card, then cancel the account. If you're keeping the card for
emergencies, pay it off and stop using it.
2. Credit score is greatly affected by the amount of credit you have available, compared to the amount you're using. A good rule of thumb is to use 20% or less of your total available credit (you don't have to use all your cards).
3. Save money with each paycheck to build up an emergency fund of at least 3 months income, but work toward 6 months.
4. Buy with your saved cash, and replenish your savings -- it's a no interest loan to yourself.
5. With what you're doing, use credit as a way of building credit, not as your primary means of purchase (remember the 20% rule).
6. Different types of credit look good on your credit report, so don't just rely on credit cards to build your score -- mix it up with a bank loan, for example.