How are credit scores and credit limit determined? What's the impact of cancelling credit cards that are new but unused? What's the impact of cancelling old credit cards that are always paid on time?

Hi Jiayee,

Credit scores are calculated based on your ability to repay your loans or outstanding liabilities to a financial institution. Credit limits are based on your drawn salary, and your credit rating. This might go up or down, depending on your history.

If you have obtained a new credit card, and subsequently not use it, it does not impact your credit score as you have not used the card at all. If you do cancel your outstanding credit card, the score will still be logged in the system.

The score follows you as an individual, and not the card. Should you decide to create a new credit card, they will take your existing information for application, and there on, as you use the card, you will accumulate good credit score.

Hope i was able to answer your questions!