Close Your Card Without Killing Your Credit Score

If you’re mad as hell at your credit card provider, and don’t want to take it anymore, closing your account might not be the credit score killer that the experts have said. In fact, FICO’s scoring model indicates that canceling your plastic isn’t such a big deal.

But doesn’t that go against the conventional wisdom? For years, the consensus among credit card gurus was that shutting down your plastic would adversely impact your credit score. By closing down what’s usually a pretty big pool of available credit, the thinking goes, you give credit scoring agencies less to go by, and that can drive your score downward.

But a new school of thought says closing out a credit card won't ruin your all-important score. In fact, it may not even matter at all.

For starters, closing out a credit card won’t wipe your card activity from your credit rating file. Typically, credit scoring agencies hold on to your credit card history for 10 years after a card has been shut down.

Plus, the history you have accumulated through your credit card still means a lot to credit scoring agencies. What matters to them, straight from the FICO Web site, includes:

  • Payment history = 35% of your score
  • Amounts owed = 30%
  • Length of credit history = 15%
  • New credit and types of credit = 10%

All of these factors are represented in your credit card account, and thus remain big factors to creditors even after you close a credit card.

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