I understand that closing revolving accounts may lower my FICO. I also understand that having too many revolving accounts may lower my FICO. It seems like this is a lose-lose situation. So what is the best way to handle closing accounts? How do I go about closing accounts so they won't hurt me in the future, without hurting my score long term because I've closed accounts? I know I should keep the longest-held accounts, and accounts with the highest limits. How do I handle this? Should I just close maybe one every six months until I hit the average of 6 open accounts?
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You have too few/too many accounts being reported on your fileAccording to your credit file, you have 10 open credit obligations being reported as current on your credit file. On average, U.S. consumers have around 6 open and current credit accounts on their credit file.
Why does
this matter? The score measures the number of accounts being reported on your credit file. Studies demonstrate that consumers with a moderate number of credit accounts appearing on their credit bureau report represent lower risk than consumers with either a relatively large number of credit accounts or a very limited number of credit accounts. The bottom line A good rule to follow: Avoid applying for credit you don't need, or don't intend to use. (By the way, closing an existing account doesn't make it disappear from your credit report immediately. So closing many or all of your accounts isn't likely to increase the score.) The best way to improve your credit rating is by managing all of your accounts responsibly, and doing your best to make all your payments on time."