Fact: Closing credit cards does nothing to improve your credit scores and, in fact, can backfire and leave you with lower scores.
When you close a credit card account, you lose the value of that card’s credit limit in the credit score calculation. The credit limit is an important component when determining a consumer’s “balance to limit”
ratio. The balance to limit ratio measurement rewards consumers who have low credit card balances relative to their credit limits.
If you close credit cards, especially those with large credit limits, you will likely cause your balance to limit ratio to go up. This can cause your score to go down, and down considerably in some extreme instances.
Additionally, if you close credit card accounts the credit bureaus will eventually remove them from your credit reports. Even though it can take years for an account to be removed from your credit reports, once it is gone you will get no benefit from your responsible management of that account.
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