rebuilding credit question

[Anonymous]

I was told by a LO to close a certain credit card because it was hurting my credit score more having it open. This credit card was paid off and closed just a few weeks ago. I am now being told that I should not have closed it that by closing it, it will hurt my credit score. Does anyone know how much my score will go down. I just got my mid score to a 589.

[Anonymous]

Honestly, I would not close any revolving credit accounts that are in good standing.

You want the available credit there to offset any credit you have used/are using (called utilization... you want your util to be around 8-10% max).

[llecs]

tblairmichigan, I removed your other duplicate post over in Mortgages.

This thread, Closing Credit Cards, is great at describing what will and won't happen by closing a CC.

In short, closing a CC won't hurt you in the short-term if all of your CC balances are below 9% utilization and if your mix of credit was unaffected by this closure (e.g. you have at least 2-3 other CCS outside of the one you closed). The history will still factor into your score for the next 10 yrs and once removed, it could have a negative impact on your score.

That LO did give some bad advice in telling you to close that CC. Closing a CC will never help your score.

[RobertEG]

I agree.  Your LO did you no favor with that advice.  You will gain nothing by this.

If his advice was simple to pay it, that is good advice.  But no reason to close it.

It wont hurt your credit score much unless it was a high CL card,  When the card was closed, and paid in full, you lost its CL in your overall % util of revolving debt.  What was the CL on the card?

But to recommend closng a now 0% util card makes no sense.

The other impact on closing the card wont be felt for up to 10 years from now, but it may have been important in your future.  At around ten years from closing of the card, its credit age will drop from your AAoA calculation.  But closing it now, even if had a very short credit history since the date it was opened, wont exclude it from your AAoA calculation.

IMHO, you got some really bad advice from a LO who does not undrestand FICO scoring.

I would contact the OC, and try to get the account re-opened with the dates on the original account.

Message Edited by RobertEG on 07-25-2009 08:41 PM