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New Member
Posts: 4
Registered: ‎06-20-2007
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Cancelling Credit Card and its Impact on your Credit Score

Is it accurate that if your overall credit card balance is zero and you choose to cancel an unused credit card, it will have little to no negative impact on your credit score, as long as the credit bureaus are made aware that I was the one who closed the account, not the creditor?
Regular Contributor
Posts: 226
Registered: ‎03-25-2007
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Re: Cancelling Credit Card and its Impact on your Credit Score

Probably not so...
Closing the account has no negative affect by itself, but FICO takes into account how long your credit history is and the average age of your open credit accounts.  It also considers how much credit utilization you are using (total available credit/ $amt used ).  So if you close an account that's been open a long time, it will hurt you.  If you decrease your overall available credit by closing out an account such that your utilization goes way up, it will hurt you.
 
Check out the Credit Scoring 101 link at the head of the forum.  I've put an extract below for your convience.  Regards and Welcome, Rocket
 

How is my score calculated?...


-30% affects Utilization. It is best to have several accounts with low balances distributed then it is to have fewer accounts maxed out. To figure utilization: Balance (divided) by Credit Limit = percentage. Lower then 10% recommended per account, this is one of the fastest means for increasing the over all credit score.


-15% affects Established History. The longer you maintain open accounts with creditors the better. When first starting out of course this is not easy; but this is where getting added as an Authorized User to another persons established credit comes in best. Remember that the contributor must have an account that has long history; clean payment record; high credit limit; and low balance. Also need to check with the creditor to insure that they have a policy to report authorized user accounts to all three major credit reporting agencies.

New Member
Posts: 4
Registered: ‎06-20-2007
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Re: Cancelling Credit Card and its Impact on your Credit Score

Thank you!
Moderator Emeritus
Posts: 6,182
Registered: ‎03-29-2007
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Re: Cancelling Credit Card and its Impact on your Credit Score

Check out the Scoring 101 thread.. Even if the creditor closes the TL it won't hurt you.
Moderator Emeritus
Posts: 6,182
Registered: ‎03-29-2007
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Re: Cancelling Credit Card and its Impact on your Credit Score

[ Edited ]
Let me clarify... the notation.. "Closed by credit grantor" won't hurt you. Your score could still drop if you close because your overall avail credit has reduced. The impact would of course depend on your CC balances.


Message Edited by Tuscani on 06-21-2007 02:06 PM
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