Does closing a credit card help your credit score?

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xfs
 
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Does closing a credit card help your credit score?

Postby xfs » Wed Jun 13, 2012 5:18 pm

Hello All. This is my first post here.

My question is, if I close a credit account which is my newest (youngest) card with only a few months of age and very small limit compared to my other cards. How does this affect me? Will it increase my credit score or decrease it?

Thank You.


xfs
 
Posts: 2
Joined: Wed Jun 13, 2012 5:16 pm
Location: UT

Postby xfs » Fri Jun 15, 2012 9:49 am

Does anyone have an answer for this?

Thank You.

American
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Postby American » Fri Jun 15, 2012 5:12 pm

It seriously depends. Your score is weighted on numerous different factors. Typically, closing a credit card can hurt your score because it lowers the available amount of credit. So, if Fred has 10k in cards and 3k in debt on those cards, one day he decides to close one of his two cards, say for simplicity sake one with 2k CL. He'll notice a dip in his score because he'll have 3k in debt over 8k in credit limits. Basically, 30% credit utilization becomes 37.5% by taking away 2k of available credit.

There are plenty of other factors. The age of the card, how many cards you have besides that one, and so on... So typically it hurts.
American Express '02: Platinum, Blue Cash Preferred 6k, SPG 2k, Delta Gold 1k
Barclaycard '11: Apple Financing Card 2.5k
Citi: Diamond Rewards 1.5k
Chase: Freedom 500
Discover '12: Discover IT 1.5k

DavidNY
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Postby DavidNY » Fri Jun 15, 2012 8:14 pm

It's a hurt, but a delayed one as the closed account will stick around on the credit report for awhile.

MemberSince99
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Postby MemberSince99 » Sat Jun 16, 2012 6:12 am

It's your smallest limit and newest card so I doubt it's really going to hurt you much, if so only short term long term, pretty much nothing to worry about. If you don't need it and aren't going to use it, might as well close it. But just keep in mind that you should only go for cards you do want and plan to use in the future.



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