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Does closing credit cards lower your credit score?

by KNashe from Fort Meyers, Florida. Jan 29th 2013 Reply


Matt Pollina (matt@smartmtgs.net)
#57 ranked lender in Illinois - 40 contributions

Credit score models use many factors when determining your score, two of which are length of established credit and available credit. It is typically better for your score to keep the card open and have a $0 balance.

Jan 29th 2013
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William J Acres (William_Acres)
#73 ranked lender in Arizona - 8,726 contributions

Yes.. Although there might be a very rare occasion where it won't.. Let's say you have 3 credit cards.. the combined allowable credit you can borrow is $3000. You owe $500 on 2 cards, and zero on the other. So your credit card debt is 33% of your maximum allowable.. if you cancel the card you owe nothing on, and leave the other 2 open, then you have changed the ratio of what you owe.. ($1000 owed divided by $2000 allowable is 50%).. so you now owe 50% of your allowable which is worse than 33%.. this will drive your score down.. so by closing that credit card, it has effected your credit negatively.. I'm a Broker here in Scottsdale AZ and I only lend in Arizona. If you or someone you know is looking for financing options, feel free to contact me or pass along my information. 480-287-5714 WilliamAcres.com

Jan 29th 2013
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Steven Ceceri (CreativeFinancingOptionsGroup)
#36 ranked lender in Massachusetts - 723 contributions

Usually the answer is yes and particularly more so when you close credit cards with a balance remaining. The credit history is more favorable for accounts that are more seasoned so keeping your accounts open is advisable. With that said, you need to weigh the cost to do so, including if there are any annual fees due, the rate of interest on the cards you are contemplating closing, etc. Good Luck!

Jan 29th 2013
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Josh Lund (Josh_Lund)
#47 ranked lender in Minnesota - 113 contributions

Great question! If you talk to 10 people, you will get 10 different answers. In my 16 years of looking at 1000's of credit reports, it has been best for my clients to leave a small balance on a couple of credit cards they have open. With closed or zero balances, in time, I have seen scores decrease because of no activity on the accounts.

Jan 29th 2013
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Steve Azarch (sazarch)
#18 ranked lender in Tennessee - 93 contributions

Yes like Matt said, it should be better for your credit score to keep your credit cards open and have a 0 balance on them.

Jan 29th 2013
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Jason Vondrak (jvondrak)
#217 ranked lender in California - 1,741 contributions

Generally it does. Your credit score is determined by looking at your available credit and comparing it to the balance on all of the cards. So, if you close a credit card while your balance remains the same on a card, you will then have less available credit overall and you will owe a larger portion of your available credit. You want to aim to not use more that 30 percent of your available credit at any time as this will cause your score to go down. Further more, your credit is determined by the length of your credit history, which is calculating the average time that each of the cards have been opened.

Jan 29th 2013
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Michelle Curtis Loan Originator NMLS 401173 (EmbassyFundingLLC)
#77 ranked lender in Florida - 2,240 contributions

Yes at least a little, it will depend on your overall credit and the amount of credit you have. If you are trying to improve your scores we can help, send us an email or call us at 754-444-1907 Team@BestMortgageOption.com ask for Benny or Michelle

Jan 29th 2013
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Joe Shamie (Joe Shamie)
#4 ranked lender in New Jersey - 1,412 contributions

It can lower the score. It really depends on what that available credit line is as a percentage of your total avaialble credit and your utilzed credt. One of the metrics used to determine your score is the amount of used credit as a percentage of avaialble credit. If you close a card that has a small available credit line, your percentage of used credit wont change to much and therefore your scores wont change much. However, if the account you are closing is a large percentage of you avaialble credit, closing that account will cause your used credit percentage to increase which will cause your scores to drop.

Jan 29th 2013
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Joe Metzler (JoeMetzler)
#19 ranked lender in Minnesota - 3,981 contributions

Maybe.... Don't just automatically close credit cards. Speak with a professional - and DON'T listen to Suzie Orman! A good example of hurting your score would be to close a card you've had for 15-years and replace it with a teaser rate card. That length of time really shows... Close it, and that history starts dropping right away.

Jan 29th 2013
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Ralph Richard Guertin (ralph@absolutelowrates.com)
#136 ranked lender in Florida - 796 contributions

I like Joe's answer!!!!!

Jan 30th 2013
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