Senior Contributor
Posts: 3,071
Registered: ‎05-17-2007

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."

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

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

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.

myFICO is the consumer division of FICO. Since its introduction 20 years ago, the FICO® Score has become a global standard for measuring credit risk in the banking, mortgage, credit card, auto and retail industries. 90 of the top 100 largest U.S. financial institutions use the FICO Score to make consumer credit decisions.

>> About myFICO
FICO Score - The Score that matters
Click to Verify - This site chose VeriSign SSL for secure e-commerce and confidential communications.
Fair Isaac Corporation is a BBB Accredited Financial Service in San Rafael, CA
FOLLOW US Social Media Facebook Twitter Pinterest Google+