Will Closing a Card Damage My Credit History? Not really. A closed account will remain on your reports for up to seven years (if negative) or around 10 years (if positive). As long as the account is on your reports, it will be factored into the average age of your credit.
While closing a credit card can affect your credit scores, it's hard to say by how much. That's because there are other factors—such as the length of your credit history and whether you have a record of making payments on time—that also play a role in your scores.
In general, keep unused credit cards open so you benefit from longer average credit history and lower credit utilization. Consider putting one small regular purchase on the card and paying it off automatically to keep the card active. At Experian, one of our priorities is consumer credit and finance education.
For most people, increasing a credit score by 100 points in a month isn't going to happen. But if you pay your bills on time, eliminate your consumer debt, don't run large balances on your cards and maintain a mix of both consumer and secured borrowing, an increase in your credit could happen within months.
The time it takes to raise your credit score from 500 to 700 can vary widely depending on your individual financial situation. On average, it may take anywhere from 12 to 24 months of responsible credit management, including timely payments and reducing debt, to see a significant improvement in your credit score.
A FICO® Score of 650 places you within a population of consumers whose credit may be seen as Fair. Your 650 FICO® Score is lower than the average U.S. credit score. Statistically speaking, 28% of consumers with credit scores in the Fair range are likely to become seriously delinquent in the future.
Keeping the card open can help maintain a healthy credit score by contributing to your credit history and utilization ratio. However, there are valid reasons to consider canceling, such as high annual fees or difficulties managing multiple accounts.
Closing one credit card account likely won't make a big enough dent to hurt your chances of approval with future lenders, especially if you'll still have another form of revolving credit open, but it's worth being mindful of this if you want the highest credit score possible.
Your credit utilization ratio goes up
By closing a credit card account with zero balance, you're removing all of that card's available balance from the ratio, in turn, increasing your utilization percentage. The higher your balance-to-limit ratio, the more it can hurt your credit.
Key takeaways
If you don't use your card, your credit card issuer may lower your credit limit or close your account due to inactivity. Closing a credit card account can affect your credit scores by decreasing your available credit and increasing your credit utilization ratio.
It's important to pay off all your credit card balances before closing a credit card — not just the one you're closing. This will ensure that your credit utilization (which makes up 30% of your FICO Score) isn't impacted.
There are some differences around how the various data elements on a credit report factor into the score calculations. Although credit scoring models vary, generally, credit scores from 660 to 724 are considered good; 725 to 759 are considered very good; and 760 and up are considered excellent.
Keeping a low credit utilization ratio is good, but having too many credit cards with zero balance may negatively impact your credit score. If your credit cards have zero balance for several years due to inactivity, your credit card issuer might stop sending account updates to credit bureaus.
"When you close a credit card account, you lose the available credit limit on that account... this makes your overall credit utilization rate, or the percentage of your available credit you're using, increase," Griffin says.
There is no fixed amount of points that your score will drop by. The impact of closing an account depends in large part on how many other credit card accounts you have open, and what the balances and limits on those cards are.
Closing a personal line of credit can harm your credit score, primarily by affecting your credit utilization ratio. When you close a line of credit, you reduce your overall available credit, which can also impact the length of your credit history.
Tip: Open a new card before closing your old one.
If you're still set on getting rid of an old card, consider applying for a new card that will better suit your needs first.
Closing Multiple Credit Cards. If, as demonstrated above, closing even one credit card account can cause downstream damage to your credit score, imagine the harm closing multiple cards at once can wreak. Again, balances and reports of late payments aren't going away just because you shutter an account.
Credit card inactivity will eventually result in your account being closed. A closed account can have a negative impact on your credit score, so consider keeping your cards open and active whenever possible.
It's generally recommended that you have two to three credit card accounts at a time, in addition to other types of credit. Remember that your total available credit and your debt to credit ratio can impact your credit scores. If you have more than three credit cards, it may be hard to keep track of monthly payments.
So, you should pay your card's statement balance in full each month by the payment due date if you want to avoid interest charges. And, as long as you pay in full by the payment due date, you'll reap the benefits of the grace period.
Even better, just over 1 in 5 people (21.2%) have an exceptional FICO credit score of 800 or above, all but guaranteeing access to the best products and interest rates.
The average FICO credit score in the US is 717, according to the latest FICO data. The average VantageScore is 701 as of January 2024.