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.

Video of the Day

Brought to you by

References

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.

Photo Credits

  • George Doyle/Stockbyte/Getty Images
Cite this Article | raiffeisen-cards.ru A tool to create a citation to reference this article Cite this Article

Related pages


timeshare loans refinancinghow to protect your debit card from scannersjersey city medical center charity careatm card vs credit cardoasdiirs 8917revocable grantor trustfixed assets debit or credit1099 employee tax deductionsdo you have to pay pell grants backwestern union money order cashedgrants for paroleesincome limits for ahcccsboarding high schools in georgiacheck cashing publixwsj prime rate historyis garnishment pre taxirs capital loss carryoverdoes food stamps buy baby formulastatute of limitations michigan debthow to protect your debit card from scannersarmy lrpcompound interest formula yearlyunit trust of india mutual fundhow can i get a replacement medicaid cardclothes for africat bill yield calculationcredit score 625what is flexible spending credit cardtcf debit cardarizona lottery payout calculatorusps forgot tracking numbermodified guaranteed annuityphfadonating crutchestax penalty on early 401k withdrawalallergy alert bracelets for toddlerstaxable income for senior citizenshow to put money on a prepaid credit cardquit claim deed virginiadistinguish between debt and equity capitalsublet agreement bostonhow do i calculate my agi from my w2nada private party value used cardiluted eps calculationmunicipal bonds or muniscompare etf fundsstudent loan tax refund garnishmentwhat is speedpaydividend growth model definitiondefinition revocable trustpoetry contests for scholarshipswhat does tlc mean for homesdifference between fair value and cash flow hedgeself employed irs formwhat is fully vested in a 401khome equity loan no appraisalhow to become a morticianh&r block early w2north carolina quit claim deed formwhere to recycle plastic bottles for casheducational ira contribution limitsmacyscreditcardpaymentpolice impounded cars for salerotary scholarships for high school studentsthe nasdaq dozenwho pays the gift tax recipient or giverreinvestment rate riskhow to fill out personal allowance worksheetoklahoma tax lienappraiser incomesams club jewelerytd easyebwhat does grantor mean in real estateare cds taxed