A Credit Utilization Ratio Of 30% Or Less Will Generally Help Your Score, While A Higher Ratio Will Usually Hurt It.

Your credit score is made up of several factors, and closing a card can change these enough to harm your score. That’s because you would be left with a $1,000 total balance and $1,000 credit limit. For example, if you owe $2,000 on a credit card, but have three different cards with credit limits totaling $10,000, then your credit.

With The Same $2,000 In Spending, Your Utilization Ratio Is Now 29 Percent.

Your credit utilization rate is the ratio of how much of your total available credit you’re using. Eventually, the credit card will drop off your credit report, because it’s no longer active. The length of your credit history makes up about 15% of your major credit scores, including your fico credit score.

A Higher Ratio May Hurt Your Credit Score.

Closing a credit card account youve had for a long time may impact the length of your credit history. Now, say you have a total credit. Closing a card could lower your fico score.

Your Credit Utilization Is Calculated Based On Your Overall Available Credit, So When You Close A Card Your Overall Available Credit Decreases.

Lowering your length of credit history. The account closure itself isn’t a problem. Closing a credit card could change your debt to credit utilization ratio, which may impact credit scores.

If The Card You Cancel Has A Credit Limit Of $3,000, Your Total Credit Available Goes Down To $7,000.

Another way you can hurt your credit score by closing a credit card is your credit utilization ratio. Accounts closed in good standing will be included in your credit report for up to 10 years, so it might take a while for that to affect you. You should avoid cancelling a credit card if you are planning to apply for other credit cards.