How does the cancelling unused credit cards affect the credit rating?

Once you cancel your unused credit card, the company stops reporting to the credit agency. If you have a credit card that you no longer use, you should cut it up(so you can't use it anymore) but leave the account open. Then the credit card company keeps reporting an open credit account in good standing to the credit agency. It will look good if you just leave it open and not use that card again.

How does the cancelling unused credit cards affect the credit rating?
I heard that even if you yourself cancel, it lowers your rating for some odd reason. I think that whole system is weird. It obviously didnt help with the mortgage lenders that got us into this crisis of foreclosures; so who gave them all that permission to have our data?????
Reply:You need to have those credit cards removed from your profile at equifax and if they won't make sure that they put a note that credit cards were cancelled by you and not the creditors.
Reply:You want to keep a good credit history. So further back (older card) accounts that are in good standing need to remain that way. Good solid record on a few accounts is better than many sporadic ones.