What impact does closing credit cards have on your credit score?

Question

What impact does closing credit cards have on your credit score?
I have a number of credits that I am not using. What impact if any would closing some of these accounts have on my credit score?

Answer 1

Part of your credit score is based on your debt to available credit limit ratio. When you close accounts, you lower the available credit and could end up with a higher debt percentage. So yes closing credit card accounts will hurt your credit score; however, your score will rebound quickly.

Another factor is that closing your oldest accounts, closes your history. Keep the oldest accounts open as long as they don't charge an annual fee.

Personally, I think keeping credit cards you don't use open just for the sake of a couple points on your credit score silly. All those extra cards have too much potential for problems. You have to keep track of them and keep them secured.

I recommend not more than two major credit cards --which you pay in full every month. Only keep store or gas charge cards if you have some kind of special circumstance.

Answer 2

Closing all your oldest accounts will hurt because having an old, open account helps your score. Closing your newer accounts will help if you have too much credit available or are not using much of your credit available. Closing any accounts will hurt if you are using nearly all of the credit available on the remaining accounts.

Answer 3

Well closing them doesn't hurt your score but having them open means that the total available balance can be deemed as potential unsecured debt. So if you have 5 cards that you carry no balance on each with a $5,000 limit you could potentially go out tomorrow and incur $25,000 in debt. Closing them makes this impossible so while have the cards with little or no debt doesn't hurt your FICO score, it does serve as a factor in loan rates.

Answer 4

Heres the trick to that. Do not close any of them. Keep open any revolving lines or credit. Make sure your balance fluctuates between 0-35% at best, do not let them go over 50% balance to high credit limit. If you would like to learn more contact me at [e-mail]

Answer 5

None as long as you leave all cards with zero balance or in good standing.