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Senior Contributor
Posts: 3,071
Registered: ‎05-17-2007
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Valid information source about closing credit cards.

[ Edited ]
Thanks to Barry for the link. I pulled these two lines from it.
Link to Barry's thread

Interview: Craig Watts

1. "The FICO score looks at credit card closures a little bit differently than lenders might."
Source


2. "But, closing credit cards is never going to help your FICO score."
Source

Message Edited by ilovepizza on 06-24-2007 11:37 AM
If we never set higher goals we would never get as far.
sol, credit 101, acr, abbreviations, calc
Senior Contributor
Posts: 4,635
Registered: ‎03-11-2007
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Re: Valid information source about closing credit cards.

Everything is absolutely correct. However, if a CC is really hurting one--steep annual fees, monthly fees, et al.--then replacing it with a better CC (which you secure FIRST) often makes a lot of sense.
 
Closing a CC reduces your overall available CL. Replacing it, even if you're replacing CC#1 with CC#2, and they have the exact same CL, does make a lot of sense when CC#1 is costing you.
 
One can do a before and after analysis of one's overall and individual CC util. It's possible one could have one's overall and individual CC util in the 1-9 range, then close a CC, and keep one's overal util in the 1-9 range. If one has other CCs, then replacement may not be necessary.
 
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