Does Closing A Credit Card Affect Your Credit Score?

If you’re thinking about cleaning up your credit report by closing a credit card account you haven’t used for years, you might want to reconsider.

Closing a credit card account can actually lower your credit score. How? It could potentially reduce the length of your  credit history.

Your credit score is made up of several factors, and closing a card can change these enough to harm your score. Here’s a breakdown:

The category assesses how long you’ve had credit and looks at the opening dates on all of your accounts.

Length of Credit History

Your utilization rate should never exceed 30%. Ideally, you’ll utilize 10% or less of the credit  you’re allotted.

Credit Utilization Rate

This is what kind of accounts you have, such as a mix of installment loans and revolving accounts.

Credit Mix

This accounts for most of your credit score and is determined by how many payments you made on time and how delinquent any late payments were.

Payment History

When you apply for new credit or a lender runs a credit check, it hits your credit as a hard inquiry and can impact  your score.

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