Does closing zero balance inactive credit card accounts affect your credit score in any negative way?

Question

If you have a bunch of credit cards open and the majority of them are zero balance would it impact you negatively to close these inactive accounts?

Answer 1

YES! I learned this the hard way through personal experience. I closed out a bunch of older cards that I wasn't using thinking it would just clean up my credit a bit (which is very good, by the way). Doing so actually dropped my score by about 40 points. After many calls I was finally able to speak with a person at one of the credit agencies and was told that since I closed out my older lines of credit, it resulted in me having a "shorter" credit history and thus reduced my score.

If any of those inactive accounts are old ones, go ahead and keep them open! (as long as they aren't charging you annual fees. If they are, you can call- almost all companies will waive the annual fee or the occasional late fee).

Answer 2

Before you close them, consider that an older account has more weight on your history than a recently opened one. So keeping older accounts at zero balance is worthwhile in case you plan to borrow later.

I know it's almost never the case, since all the new cards you get come with 0% APR and all the old ones carry some godawful APRs like 17.99%, but on the general principle I don't close an old credit card unless it has annual or inactivity fee.

Answer 3

Cigarnation is right another reason it drops your score is because it is based on how much credit you have used versus what you have available. If you close the zero balance ones and keep the ones with balances it looks like you are close to being maxed out which will drop your score. Sometimes, severely.

Answer 4

Yes it will. One of the many measurements for credit scores is credit available to balance ratio. So if you close your accounts your available credit has decreased giving you a smaller ratio and a lower score.

Answer 5

Yes.

I suggest you to keep them open and actually apply for more.

If you get to 800 (Credit Score) you can drop me a line.

Top 4 Answerer un Business & Finance. (Vote for me. I just need 200 more votes)

Answer 6

I don't think it should, but it might. Credit rules are very strange--one of the things they look at is your percentage of debt to total revolving credit. Guess what--if you cancel some that percentage goes up, so your rating might drop.

Answer 7

It would probably help you out if decided to close these cards, just keep a couple and of them and close the rest

Answer 8

I think it shows on your credit report but shouldn't affect it too seriously if you still have other cards or loans, make regular payments and aren't late with them.