Does closing a credit card account lower your credit score? If yes, why?

Question

Even if you have completely paid off the card before closing the account?

Answer 1

no, It can have the opposite affect if you have too many credit cards. Closing an account you are not using will raise your credit score as long as you have at least one other revolving charge account.

Answer 2

Not neccessarily.

It COULD make your score go down for the following reasons:

1) You have a limited number of accounts- they like to see a few of different kinds (installment loans, Credit cards, etc.)

2) It was one of your older accounts,and closing it shortened the average history of your accounts.

3) you have outstanding balances on other cards,and closing an account with available credit brought your overall utilization ratio UP.

Answer 3

Closing an account with a significant available credit line can lower scores because it lowers your overall available credit thus increasing your debt ratio.

Here is some additional info. Hope this helps.

Answer 4

Yes, closing a credit card account with a zero balance will indeed lower your credit score. One component of your score is the amount of debt vs. the amount of credit still available. Obviously, the lower the ratio the better. Thus, if you lower the amount of credit available it will make this ratio higher (worse).

I know it seems counter intuitive but the higher the amount of UNUSED credit the higher your credit score.

Answer 5

Your credit rating is determined by a number of factors. 1) Length of credit history (closing your accounts reduces the length of time you've had the account) 2) Total amount of credit versus total amount of debt 3) Number of credit inquiries within the past year 4) Payment history (late payments versus on time payments

Closing your account may reduce your score by affecting the length of time you've had the particular account open--the longer the better.

Answer 6

if it you had this credit card along time and cancelled it, it could lower your score. Too many credit cards can lower it so if you are cancelling, do the most recent ones

Answer 7

Taylor G is correct.

Take a trip to http//www.myfico.com and look at the consumer education areas.

This is the home site of the folks who developed the FICO credit scoring system, and there is a lot of good info on how you score is calculated, and what you can do to improve it.

Answer 8

ultimate your oldest mastercard ought to impact your credit whilst it comprises credit age (15% of the credit). yet no longer till that account drops off your credit checklist after approximately Ten years or so.