does closing off credit card account's once there paid off effect your credit score?

Answer 1

Yes, negatively. When you close the account, you have less credit available to use, so your credit usage ratio compared to credit available is higher. Plus closing an account, shortens your average account age. Both items are calculated into your credit score.

Answer 2

Yes. Normally, it will lower your score, but it depends on a few things.

How old is this account compared to your other accounts? If this is one of your older accounts (or the oldest), then closing it will shorten your average account length (and if it's the oldest, closing it will shorten your credit history length). Shortening your credit history length is bad for your score.

A big part of your score is credit utilization. Utilization is the amount of revolving credit used divided by amount of available revolving credit. In general, the lower your utilization, the better for your score (scores seem to really go down when utilization is above 30%). If you have $500 charged out of a total of $2,000, then you have 25% utilization. If you close one of your cards that had a $1,000 limit, now you have $500 charged out of a total of $1,000 and then your utilization would be 50%.

All that being said, if this card is charging you a large annual fee (or even worse a monthy fee!), then maybe you should close it. Unless you are planning on making a large financed purchase, there is no need to live and die by the credit score.

Good luck.

Answer 3

I am not a credit expert...I can tell you that more of what your credit score is based upon - depends on things like payments you were late on, or payments you never made.

Closing a credit card does help, however.
Be sure to pay off the card, cut it up and send it back to the issuing creditor...along with a dated & signed letter that you are closing your account and returning the card.

If you payoff an account and simply keep the card, and use it anytime within 6 months of inactivitiy, it is still considered an active account.

Answer 4

yep, because by paying off the card and leaving it open your credit report will show that you have access to it and could use it at anytime and therefore it is counted against you as if you had that card maxed out even though you do not. if its like a $500 limit, you may want to consider leaving it open if you do not have money put away or other options for emergency's because that wont make a very big difference, if its a higher limit you may want to consider calling the credit card company to lower you credit limit if you think you may need the card down the road if somthing comes up. otherwise just close it, im not totally sure how many points your credit score will go up but it will go up.

Answer 5

Yes - it improves it. When your credit report shows that you not only paid off the accounts but that you closed them voluntarily, that is looked at as very favorable and it will make your credit score go up. Check out the website below for more information.

Answer 6

One evaluation of credit score is how much UNUSED credit you have. It helps your score to have high-value credit lines NOT in use.

But it hurts your credit score to have lots of low-value credit lines open, even if you're not using them

So, close the ones with low values, and keep the ones with high values.

Answer 7

Yes, it lowers your score.

The amount of UNUSED unsecured credit is a factor in your credit score. While it may seem counter intuitive, the amount of unused credit as a percentage of your total credit limit is a factor. The higher that ratio the better.

Answer 8

Yes, the best thing to do is shred the card, and leave it alone. It will help boost your score

Answer 9

Yes, don't close it. Unless you have large amounts of money available to you, because this can harm your ability to get a loan too.

Answer 10

Yes. If you want to build the rating, email me.
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