Does Canceling an Unactivated Credit Card Affect Your Credit?

Credit card activation means calling the issuing bank and following the instructions that come with your new card to make the account usable. You cannot make charges, get cash advances or do any other transactions without completing activation. Canceling your card before you activate it may affect your credit score, depending on how quickly you close the account.

Timing

Credit card companies do not immediately report brand-new accounts to the three credit bureaus. Your credit score comes from your TransUnion, Experian and Equifax credit reports, so that number only is affected once the account gets added to the credit bureau records, according to Bankrate writer Leslie McFadden. Reporting usually happens within one billing cycle, whether or not you activated the credit card.

Considerations

The inquiry triggered by your credit card application affects your credit, even if you close the account before it is reported to the credit bureaus. TransUnion, Experian and Equifax all record a "hard inquiry" in their records when a card issuer pulls your credit report copies to evaluate you for a new account. This credit check costs you up to five points on your credit score, the MyFICO scoring website explains. Your score takes a bigger hit if you have other recent inquiries, especially if there are more than six, because that number marks you as a high bankruptcy risk.

Effects

Credit card cancellation lowers your credit score by changing your available credit as compared to what you owe, whether or not you completed activation. Your account balances ideally should not exceed 10 percent of your credit lines, although they can go as high as 30 percent before serious harm starts, MSN Money writer Liz Pulliam Weston explains. Your balance improves when you get a new credit line, but you lose the benefit by canceling the card rather than simply keeping it unused or activating it and using it sparingly.

Confirmation

Confirm the presence or absence of a canceled account on your credit reports by ordering free copies through AnnualCreditReport.com. Use this official website, the Federal Trade Commission advises, because it provides TransUnion, Experian and Equifax reports with no cost or required qualification purchase. Your credit score is safe if the account does not show up at all. The score likely dropped if you see it as a closed credit card. The activation status does not show up at all.