Can I Increase My Credit Score by Closing New Account?

Question

Hi,
I recently scored a 850 credit score - according to TransUnion. They say I'm a "B" because the new scores now go up to 990.
I want to get a higher score. I pay all my bills but I have too many unused credit cards. Two months ago I stupidly applied for a new credit card to get a discount. If I close this account today, will that raise my credit score, or lower it?

Answer 1

The score that you are looking at is not a true FICO score and not generally used by any or all creditors.

Closing an existing account could possibly lower your score. You would be raising your overall utilization by losing that credit limit. Also, your scores have probably not recovered from the inquiry when you applied for the card.

If your existing accounts are at or near zero balance then you probably will not take much of a hit if you decide to close the card.

If you have to pay a fee on the card - close it.
If it's a Cap One card - close it since Cap One does not report credit limits anyway. They only report high balances which hurts utilization and generally always makes the account look maxed out.

If you decide to keep the card, just use it every 6 months or so an make a small purchase then pay in full when you get the statement. Doing that will make the card work for you.

Answer 2

It depends on how many other cards you have. They say that you want to have three or four cards open. Go below or above that and your score goes down. Since you say you have too many unused credit cards, I'm betting this was a good move on your part.

This doesn't apply in your case, but never close your oldest credit card, otherwise you will lose parts of your credit history -- they will have no more record of you having credit for that period between when you obtained your old card and you obtained your next oldest card.

The TransUnion credit score is bogus. It's not true that "the new scores" go up to 990, they just have a bogus credit score that means very little. Get a FICO score at http://www.myfico.com and you'll get what lenders use, not some lame excuse for ripping you off.

Answer 3

First off, congratulations for showing your responsibility with your credit by having a high score. Depending on how long you've had the cards, I wouldn't close any at this point, especally if you've had them for a while. 35% of your score is comprised of how long you've had the accounts. Closing accounts can send mixed signals when your credit evaluated. Be cautious in applying for new credit, and continue to pay on time, if not early.

Answer 4

I've heard that having credit cards that you dont use, but keep open actually helps your credit score. The easiest way to increase your score is to use some of those cards and pay them off right away.

Answer 5

If you have plenty of available credit/low balances on your other card, and you only close the newest card, yes, this has the potential to up your score.

Answer 6

It could do both but if u don't use it colse it..