Strange scenario for closing credit card to *help* credit score?

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Joined: Sat Sep 08, 2012 11:28 am
Location: Raleigh, NC

Strange scenario for closing credit card to *help* credit score?

Postby saigafreak » Sat Sep 08, 2012 11:33 am

I know that for the vast majority of cases, closing an account will necessarily ding your overall credit score, as your utilization percentage will typically rise as a result (assuming a card that has much lower than overall utilization).

However, let's say that my only credit card that has a high utilization (near credit limit) is closed, bringing down my overall utilization (think of the simple case scenario where 2/3 = 66% and reducing the numerator and denominator by 1 yield 1/2 or 50%).

Theoretically it sounds like a good plan, but I don't know what it will entail. Just seeking out general advice. I am paying that card down as fast as I can, but we're in a good position to refinance our home soon and while I'm at the 720+ level, it would be nice to get utilization down to the below 30% mark so I could get a quick bump up my score, perhaps to the 740+ magic level for best rates.

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