Itqualityassurance
Your score is based on the average age of all your accounts, so closing the one that's been open the longest could lower your score the most. Closing a new account will have less of an impact.
- Does a closed account hurt your credit score?
- How many points does your credit score drop when you close an account?
- How do I close an account without affecting my credit score?
- Why does closing an account hurt your credit?
Does a closed account hurt your credit score?
While closing an account may seem like a good idea, it could negatively affect your credit score. You can limit the damage of a closed account by paying off the balance. This can help even if you have to do so over time. Any account in good standing is better than one which isn't.
How many points does your credit score drop when you close an account?
On average, a user's VantageScore credit score fell by 6 points in the month after they opened a credit card and increased by 2 points in the month after they closed a credit card. But wait, didn't we just say that most people see their credit score fall when they close their card? (Yes.)
How do I close an account without affecting my credit score?
If you pay off all your credit card accounts (not just the one you're canceling) to $0 before canceling your card, you can avoid a decrease in your credit score. Typically, leaving your credit card accounts open is the best option, even if you're not using them.
Why does closing an account hurt your credit?
For starters, when you close a credit card account, you lose the available credit limit on that account. This makes your credit utilization ratio, or the percentage of your available credit you're using, jump up—and that's a sign of risk to lenders because it shows you're using a higher amount of your available credit.
