How Can I Cancel My Credit Cards Without Hurting My FICO Score?

by Leigh Thompson
Closing a card removes the temptation to use it.

Your FICO score directly affects your financial life and such a powerful force usually has some misinformation following it around. One myth is that closing a credit account can mess up your credit score. However, it shouldn't hurt your score significantly if you have other credit lines and no immediate credit needs, MSN Money says. The biggest hits happen when you lose a credit line and your account age falls. Offset those factors and canceling credit cards won't have a big impact on your score.

Dump the Right Cards

Limiting the damage to your credit score means canceling the right cards. Never close your oldest credit card accounts, says The Motley Fool, a financial information site. The oldest accounts contribute to the age of your credit report. By canceling these cards your account history age falls, which could hurt your credit score. The length of your credit history accounts for 15 percent of your FICO score, says MyFICO, the site for the company that calculates your score. A long history of positive accounts usually yields the best credit score.

Pay Off Debt

Closing a credit card removes its available balance from your available credit. Your utilization percentage -- the amount you owe in relation to your total credit balance -- then rises, lowering your score. MyFICO estimates that your total utilization makes up 30 percent of your score. If you're maxed out on your other cards, closing an account with plenty of available credit will hurt. Make sure you owe less than 30 percent of your available balances across the board before you start cutting up cards.

Do It Right

Canceling your card is a multi-step process. Pay off your bill first because you can’t close an account with an outstanding balance. Next, contact your card company to make sure you're completely paid off because there may be a few more interest charges coming due depending on your billing cycle. Tell the customer service representative you want to close the account. Make sure the account is noted as being closed by consumer, which looks better on your credit report. Follow up in writing to confirm the account cancellation. Allow for at least 30 days before pulling your credit report to verify the account shows as closed.

Think It Through

Closing an account has one benefit: you can’t use it anymore. If you view the card as a temptation to spend, close it out. Companies that issue cards with annual fees or high interest might negotiate the terms if you say you want to cut it up. Contact the card issuer and threaten to cancel if they don’t. Never close a card just because you think it helps your FICO score. The highest damage occurs in the first six months of the card’s existence. Keep in mind that leaving the account to age helps your credit score.

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About the Author

Leigh Thompson began writing in 2007 and specializes in creating content for websites. She has been published online in various capacities. Thompson has an associate degree in information technology from the University of Kansas and is working on a bachelor's degree in business and personal finance.

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