I hate loose ends, especially financial loose ends.  If you have old accounts that you no longer use like credit cards, home equity lines or other bank accounts, you should close them.  In case you need convincing, I've created a list of the reasons you should close unused accounts.

When ING kept sending me statements via email, I wondered what was going on.  I logged into my account and found that I still had a home equity line open with them.  I called ING and closed the account.

If you're like me, you're busy.  You tend to forget small details.  That's why it's a good idea to close accounts you don't use.  It's just too easy to forget about them.  Here's my list of reasons for closing old accounts (if you really need one).

  1. Prevent Identity Theft

    If you've forgotten about the account, it's that much easier for a crook to take it over.  You're not expecting to get statements so you won't notice if someone changes your mailing address.

  2. Prevent mistakes by the company.

    If you've got an account you're not watching bad things can happen.  The company can send out another credit card to an old address or they can charge you inactivity fees.  You could end up owing money on an account you don't use.  Worse yet you could become a victim of identity theft.

  3. Remove the lien on your house

    If you have a home equity line, 2nd or 3rd mortgages then that company probably has a lien on your home.  If you go to sell it it's one more thing you have to mess with.

    I found out the previous owner's mortgage company "forgot" to clear the lien on my house.  I was refinancing and I had to call the original title company and chew them out several times to get anything done.  When you're trying to sell you house you don't want extra problems, you'll have enough, believe me.

  4. Cut down the clutter.

    We get enough junk mail. We don't need additional statements, emails, etc coming in each month.

  5. Get if off your mind.

    Mental clutter is worse than physical clutter.

  6. Avoid the temptation to spend.

    If you have an open line of credit it's too easy to use it.

  7. Possible FICO Benefits

    Closing accounts could either help or hurt your credit score, if you care about that sort of thing.  I personally believe your FICO is worthless.

Take a few minutes and write down any accounts you don't use regularly.  Then go through the list and contact each company over the phone or in writing and get the account closed.

I find it's good to clean up old accounts once a year or so.  Get a free copy of your credit report and look over all the accounts.  If there are some you don't use or don't recognize, call the company and get it taken care of.

You don't want to mess around with this stuff when you're trying to buy a new house.  Worse yet, you don't want to get a collection call for an account you haven't used in a long time.  It's worth a half hour of your time.

Tags                            


Related Posts