Does Closing a Credit Card Hurt Your Credit Score?

Yes, closing a credit card can lower your credit score. It mainly raises your credit utilization ratio, because you lose that card’s credit limit while your other balances stay the same. Over time, it can also shorten your credit history and reduce your number of open accounts. How much it matters depends on your overall profile.

Maybe you don’t use the card anymore, it has an annual fee, or you want to simplify your finances. Credit scores are shaped by several connected factors, and closing a card can shift more than one at once. It’s worth understanding those effects before you act. Credit Saint has helped 350,000+ people work toward their credit goals.

How Does Closing a Credit Card Affect Your Score?

Higher Credit Utilization

When you close a card, your total available credit shrinks. If your balances stay the same, your utilization ratio rises. For example, two cards, each with a $5,000 limit and a $1,000 balance, give you 20% utilization ($2,000 of $10,000). Close one card and that becomes 40% ($2,000 of $5,000), a meaningful shift that may lower your score. Read more about how credit utilization affects your credit score.

Shorter Credit History Over Time

Credit history length is another factor scoring models weigh. Lenders generally view a longer, consistent track record as a positive sign, often reflected in your average age of accounts.

A closed card with a positive history may remain on your report for up to 10 years. Closed accounts generally continue to count toward credit age while they remain on your report, but they will eventually age off. If it was your oldest card, your credit history could look shorter once it drops off.

Fewer Active Accounts

As our guide to how credit scores work explains, scoring models also consider the mix and number of open credit lines. Closing a card reduces your active revolving accounts. If it was your only credit card, you’d have no active revolving credit, which makes it harder for future lenders to judge how you handle credit now.

When Does Closing a Card Make Sense?

In some situations, closing a card may be the right call, or at least carry little risk:

• High annual fees with no benefit: If a card carries a large annual fee and you’re not getting equal value from its rewards, closing it may be worth the trade-off. First, ask the issuer about a fee waiver or a product change to a no-annual-fee version.
• Spending patterns that create debt: If a card keeps leading to balances you can’t pay off, closing it may be the right financial decision despite the short-term score impact. Our guide on when to stop using credit cards can help you decide.
• A very new card that isn’t the right fit: Closing a card that is less than a year old usually has a smaller effect on your credit age than closing an older card.
• Fraud or identity theft: If a card has been compromised and can’t be secured, closing it is a necessary protective step regardless of score impact.
• Multiple store cards with low limits: If you hold several store cards with small limits that you rarely use, closing one may have limited impact on utilization if your other cards carry high limits.

What Can You Do Instead of Closing a Credit Card?

Before closing an account, these options may protect your credit profile while addressing the underlying concern:

• Keep the card open and unused: If the card has no annual fee, leaving it open preserves your available credit and account age. Using it now and then for a small recurring charge, and paying it off, helps keep the issuer from closing it for inactivity.
• Downgrade to a no-annual-fee card: Ask your issuer whether you can product-change to a no-fee version. This keeps the account and its history without the ongoing cost.
• Pay down balances before closing: If closing is unavoidable, lowering balances on your remaining cards first will help offset the loss of available credit.
• Request a credit limit transfer: Some issuers may let you move part of the closing card’s limit to another card you hold with the same bank. It’s not common, but it’s worth asking.

How Credit Saint Reviews Your Full Credit Picture

Before making any credit decision, it helps to know exactly what’s on your report. You can start by getting all three of your credit reports. Errors are well documented: according to the FTC’s 2013 study, 1 in 5 consumers found at least one error on their reports. Those errors can affect your score regardless of any card closure decision.

Our specialists review your reports across Equifax, Experian and TransUnion and identify entries that may be inaccurate, misleading or unverifiable. With your authorization, we may challenge those entries through the formal dispute process and monitor responses throughout. You review and authorize, and our specialists handle the process from there.

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Check Your Report Before You Close a Card

Closing a credit card isn’t a decision to take lightly. It can affect your utilization, credit age and credit mix, sometimes all at once. Before acting, reviewing what’s on your report is a good first step. You may find other factors affecting your score that are worth addressing first.

Credit Saint has reviewed credit reports since 2007. Credit Saint can review your reports and challenge items that may be inaccurate, unverifiable or outdated. You authorize every step, and our specialists handle the process from there.