Does closing a credit card affect my credit score?

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by kimberly , in category: Banking and Credit , a year ago

Does closing a credit card affect my credit score?

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2 answers

Member

by jaron , 10 months ago

@kimberly 

Closing a credit card can potentially affect your credit score, but it depends on several factors. Here are a few things to consider:

  1. Credit utilization: Closing a credit card reduces your overall available credit, which can increase your credit utilization ratio. This ratio is the amount of credit you're using compared to your total available credit. A higher utilization ratio may negatively impact your credit score.
  2. Length of credit history: Closing your oldest credit card can shorten your average account age, which is a factor in determining your credit score. If you have other long-standing credit accounts, the impact may not be significant. However, if it's your only or oldest card, it can impact your credit history length.
  3. Payment history: Closing a credit card will not immediately remove its payment history from your credit report. As long as the closed card had a positive payment history, it will continue to contribute positively to your credit score for up to 10 years after closure.
  4. Mix of credit: Closing a credit card may reduce the variety of credit accounts you have, which can impact your credit mix. A diverse mix of credit, including credit cards, loans, and mortgages, is generally considered beneficial for your credit score.


Overall, the impact of closing a credit card on your credit score can vary depending on your unique credit profile. It's essential to consider these factors before making a decision.

by paolo.leuschke , 5 months ago

@kimberly 

Closing a credit card can potentially affect your credit score, but it depends on several factors. Here are a few things to consider:

  1. Credit utilization: Closing a credit card reduces your overall available credit, which can increase your credit utilization ratio. This ratio is the amount of credit you're using compared to your total available credit. A higher utilization ratio may negatively impact your credit score.
  2. Length of credit history: Closing your oldest credit card can shorten your average account age, which is a factor in determining your credit score. If you have other long-standing credit accounts, the impact may not be significant. However, if it's your only or oldest card, it can impact your credit history length.
  3. Payment history: Closing a credit card will not immediately remove its payment history from your credit report. As long as the closed card had a positive payment history, it will continue to contribute positively to your credit score for up to 10 years after closure.
  4. Mix of credit: Closing a credit card may reduce the variety of credit accounts you have, which can impact your credit mix. A diverse mix of credit, including credit cards, loans, and mortgages, is generally considered beneficial for your credit score.


Overall, the impact of closing a credit card on your credit score can vary depending on your unique credit profile. It's essential to consider these factors before making a decision.