Does cancelling a credit card lower my credit score??

waterjug

Senior member
Jan 21, 2012
930
0
76
I don't carry any balance forward on any card, but I have too many right now; I have two cards I never use. One a Macy's from a few years ago that I no longer use, and an Old Navy card that I only used a few times before I realized I don't go to Old Navy enough to justify the discount I get on clothes by keeping the card. I'm looking to get a Discover Cash Back card, but I don't want to carry 5 credit cards, so I want to ditch the ON & Macy's cards. What I need to know is, will this negatively effect my credit score??

Thanks
 

Ketchup

Elite Member
Sep 1, 2002
14,545
236
106
In the short term, yes. You well have less total available credit when you cancel the cards. Since your total debt will be a higher percentage of your total available credit, your score will go down temporarily.

This doesn't lost too long though. In the long term, you will be better for it. Credit card debt is not 'good debt.' You will never regret cancelling a credit card.
 

ImpulsE69

Lifer
Jan 8, 2010
14,946
1,077
126
Credit scores are like the gas prices. Everything makes it change. Just pay your bills on time and you'll be fine.
 

Via

Diamond Member
Jan 14, 2009
4,695
4
0
Just don't cancel them right before you're going to apply for a sizable loan of any kind.
 

OutHouse

Lifer
Jun 5, 2000
36,413
616
126
credit score is based upon how much debt you have. less debt = lower score.
 

thegimp03

Diamond Member
Jul 5, 2004
7,426
2
81
I've heard it can be detrimental to your score to cancel any credit card you've had the longest. Any other times, it might be a minor short-term impact, but your score will eventually go up again.
 

marvdmartian

Diamond Member
Apr 12, 2002
5,548
19
81
Cancel any card and you'll regret it for the rest of your life.

:rolleyes:


Credit scores are partially determined by how much total credit you have available, versus how much credit you have charged (how much you owe). Better to owe $1000 on a $5000 total available credit, than to owe $1000 on a $3000 available credit (for instance). Even looks better to owe nothing on $10,000 available credit, than owe nothing on $8000 (make sense?).

Since those cards are currently at zero balance, even if they have a low available credit, they make your credit look better.

What I might suggest is to get the Discover card, THEN cancel out those two other cards. That way, you qualify for the best deal from Discover, BEFORE you ding your score a little bit.

And while cancelling a credit card that you've had for a long time can also ding your score, if you have another one that's nearly as old an account, it really won't ding you too badly. Back when I first tried re-establishing credit, I applied for a card that was easy to get, but hit me up for $45/year. I cancelled it, last year. So far as I can tell, it did NOTHING to my score, since I had another card that was nearly as old of an account (13 years old, versus 14 years for the cancelled card).
 

CraKaJaX

Lifer
Dec 26, 2004
11,905
148
101
credit score is based upon how much debt you have. less debt = lower score.

Is that really true though? I have a TransUnion account and I keep track of my credit score fairly often. I have ~50k in student loans, which obviously is considered debt. However my credit score is in the "excellent" range (750+). Having debt doesn't necessarily make you're score go down, you just have to keep making the proper payments and you'll be fine.
 

SandEagle

Lifer
Aug 4, 2007
16,813
13
0
theoretically yes, but who gives a shit? i don't live my life around some bullshit number like 'credit score'.
 

waterjug

Senior member
Jan 21, 2012
930
0
76
:rolleyes:


Credit scores are partially determined by how much total credit you have available, versus how much credit you have charged (how much you owe). Better to owe $1000 on a $5000 total available credit, than to owe $1000 on a $3000 available credit (for instance). Even looks better to owe nothing on $10,000 available credit, than owe nothing on $8000 (make sense?).

Since those cards are currently at zero balance, even if they have a low available credit, they make your credit look better.

What I might suggest is to get the Discover card, THEN cancel out those two other cards. That way, you qualify for the best deal from Discover, BEFORE you ding your score a little bit.

And while cancelling a credit card that you've had for a long time can also ding your score, if you have another one that's nearly as old an account, it really won't ding you too badly. Back when I first tried re-establishing credit, I applied for a card that was easy to get, but hit me up for $45/year. I cancelled it, last year. So far as I can tell, it did NOTHING to my score, since I had another card that was nearly as old of an account (13 years old, versus 14 years for the cancelled card).


Thanks! I want to get the other card first, definitely. I'm moving into a new apartment soon, so I may wait til after just in case they check my credit when I apply
 

OutHouse

Lifer
Jun 5, 2000
36,413
616
126
I sure hope it is since it is April 1, because if not, that is extremely poor advice to give someone.

no joke, its 100% dead on. ill take Dave Ramsey's advice any day.

Dump debt, save money, and pay cash. Do that and you will be well on your way toward building wealth—not your credit score. And what’s more important?

http://www.daveramsey.com/article/the-truth-about-your-credit-score/lifeandmoney_creditcards/

The dreaded FICO score. It’s that number that’s associated with every credit report. We all know about it—most people have one—but what does the credit score really mean?

Like it or not, your credit score is not an indicator of winning financially. All it tells you is whether you are good at borrowing money and paying it back. That’s it.

But let’s take a deeper look. How is your FICO score determined?

35% of your score is based on your debt history.
30% is based on your debt level.
15% is based on the length of time you’ve been in debt.
10% is based on new debt.
10% is based on type of debt.

It’s the I-Love-Debt Score

Your FICO score is an I-love-debt score, isn’t it? Does it factor in your income—or, even better, your debt-to-income ratio? Nope. Does it factor in your savings accounts, net worth—anything other than debt? Absolutely not.
 
Last edited:

blackangst1

Lifer
Feb 23, 2005
22,914
2,359
126
If you close it with a 0 balance, no it wont. If you close it WITH a balance, your FICO will take a small hit.

With a 0 balance, even closed cards are calculated into your utilization. In other words, a closed card with a $1k limit counts in your total limits; however, close a card with a balance, and that card will reflect negatively in your utilization, as FICO considers the balance as your limit. So if you have a $10 balance, its considered a 100% utilized card, thus pulling down your FICO. Utilization is 30% of your FICO.

The opening dates of closed cards also count in your AAoA (average age of accounts) which is 15% of your FICO.

Your payment history on closed accounts is also factored into your FICO, which is 35% of your FICO score.

Closed cards will usually fall off your reports in 10 years give or take.
 

OutHouse

Lifer
Jun 5, 2000
36,413
616
126
If you close it with a 0 balance, no it wont. If you close it WITH a balance, your FICO will take a small hit.

you can close a account with a balance??

the last time i tried that it was a Chase card and they would not let me close it until i was paid off to a 0 balance.
 

blackangst1

Lifer
Feb 23, 2005
22,914
2,359
126
you can close a account with a balance??

the last time i tried that it was a Chase card and they would not let me close it until i was paid off to a 0 balance.

Yes, you can. Or the company can. Either way would have the same net effect on FICO.
 

SandEagle

Lifer
Aug 4, 2007
16,813
13
0
You can't close an account with a balance...

If you close an account it will change your score because a portion of your score is calculated by your total available credit and how much of that credit you are using.

So, if you had $10K in credit and use $5K of it you're at 50% utilization. If you closed a $2,500 CC you now only have $7,500 and are still using $5k but now your utilization is 67%. Your total credit line goes down and your utilization goes up. Your score WILL change because of this.


actually you can. i closed a chase credit card with an 11K balance. just couldn't stop spending. had that card for 15 years. had been paying the balance on it and still owe 5900. :( i should seriously just walk away, but my conscience tells me otherwise.