CC Utilization

[hubbryan]

I am considering closing a few of my small credit limit CC's that I don't use anymore. I was wondering, if I close the accounts with a $0 balance, will the credit limit still be factored in my utilization if the account is closed? 

[SouthJamaica]

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@hubbryan wrote:

I am considering closing a few of my small credit limit CC's that I don't use anymore. I was wondering, if I close the accounts with a $0 balance, will the credit limit still be factored in my utilization if the account is closed? 

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No, the limit on a closed card is not counted in your utilization.

[JoeRockhead]

No, the limit is no longer factored into your score, you keep  the history of the account, not the CL

[CLabuser]

don't ever close cards, just keep them open and age them out. 

[Horseshoez]

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@CLabuser wrote:

don't ever close cards, just keep them open and age them out. 

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While I might agree with this sentiment, I would argue such an absolute is absolutely incorrect.  If one has cards which are no longer useful, and have an annual fee, close those suckers.

[FireMedic1]

I just closed 8 cards and always have been AZEO. Didnt drop 1 pt.

[Thomas_Thumb]

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@hubbryan wrote:

I am considering closing a few of my small credit limit CC's that I don't use anymore. I was wondering, if I close the accounts with a $0 balance, will the credit limit still be factored in my utilization if the account is closed? 

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If one of the cards on your close list is your oldest card, consider keeping it open. You can call and request a CLI on the card. As mentioned above, cards not used that incur annual fees are best closed. A closed card will still contribute to credit history for up to 10 years. However, since the account is closed, it has no available credit and therefore can no longer contribute to total credit.

[Iusedtolurk]

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@hubbryan wrote:

I am considering closing a few of my small credit limit CC's that I don't use anymore. I was wondering, if I close the accounts with a $0 balance, will the credit limit still be factored in my utilization if the account is closed? 

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@hubbryan  I wish it was like that (Keep history and credit limit) Overstock credit card just closed down and I lost 11000 in my credit line. My utilization took a serious hit and caused me to lose a lot of points.

[Horseshoez]

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@Iusedtolurk wrote:

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@hubbryan wrote:

I am considering closing a few of my small credit limit CC's that I don't use anymore. I was wondering, if I close the accounts with a $0 balance, will the credit limit still be factored in my utilization if the account is closed? 

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@hubbryan  I wish it was like that (Keep history and credit limit) Overstock credit card just closed down and I lost 11000 in my credit line. My utilization took a serious hit and caused me to lose a lot of points.

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And this is an example of pretty much the only time closing a card will hurt scores; for folks who keep their balances at zero (or near zero), closing a card will not hurt at all.

[markbeiser]

Some scoring models, admittedly ones i don't think anyone really uses anymore, are affected by average credit limits on your open cards.
The FICO "resilience index", a score where a lower number is better, is also affected by what percentage of your open credit accounts are credit cards, though I've no idea if any lenders actually look at the resilience index.
For people who have extremely low utilization, closing low limit cards won't hurt their FICO8, 9, or mortgage scores, and will improve some of the less talked about/used scores.

I closed 5 cards with low limits, and one with a $4.7k limit with no real chance of growing, 6 total cards last month.
Only 2 have reported as closed so far, and already my FICO 3 score has gone up 23 points, and my "resilience index" has dropped 4 points(lower is better on it).
Basically just closed crappy rebuilder cards, and my Apple card since the $600 limit on it wasn't going to grow any time in the forseable future