Being a credit card holder, you must have wondered will closing your credit card hurt your credit score or not?

This is a tricky question because credit scores depend on multiple factors. Knowing the answer is also important because there are many situations in life where you want to close a credit card account.

Closing a credit card does not hurt your credit score if you have paid the balance.

This means you can safely cancel your credit card account after paying the outstanding balance. Keep in mind that closing a credit card will impact your credit utilization ratio by reducing your total available credit.

Let’s dive deep into this and understand the science behind credit scores, credit cards, and credit utilization.

Will Closing Credit Card Hurt Your Credit Score Post Header Image

Will Closing Credit Card Account Hurt Your Credit Score?

No, closing a credit card won’t hurt your credit score, in most cases.

Now it will impact your credit utilization as I previously stated, but the impact will be insignificant if not nonexistent.

That’s because credit utilization is calculated by taking the total amount of all your credit combined and figuring out your total balance across all credit cards, loans, etc.

So, if you cancel a credit card account, your limit will no longer be counted in the calculation. But any balance you still owe on the card will.

You can mitigate this effect simply by making sure you pay off the balance before canceling your credit card so it doesn’t hurt your score.

To sum things up, closing a credit card won’t usually hurt your credit score unless you have failed to pay off the outstanding balance.

What is a Credit Utilization Ratio?

The credit utilization ratio is the amount of available borrowing divided by the total outstanding balance. The lower your credit utilization ratio, the better it is for your credit score.

Is it possible to close a credit card without hurting your credit score? Yes, you can close a credit card account without hurting your credit score.

The Five Factors as to What Affects a Credit Score
Credit utilization makes up nearly 1/3 of your score.

Credit cards are often used to build credit history; if you stop using them, it could hurt your credit score. However, if you pay off the balance on your credit card every month, closing the account is no problem.

The best way to keep your credit score high is to pay off balances in full each month. In other words: don’t carry a balance on your cards; instead, pay them off each month.

Why Experts Advise Against Canceling Credit Card?

If you are stuck in a situation where you feel the need to cancel your credit card, for example, if you’re being charged outrageous interest fees, you can and should close your credit card immediately.

Experts advise not to close your credit card because it can negatively impact your credit utilization ratio, which is a factor that can impact your credit score.

So, before you go closing your credit card accounts, know that it will impact your credit score. Exactly how severely depends entirely on you and your financial responsibility and obligations.

If you do plan on canceling it, do it properly so that it doesn’t affect your credit score in any significant way.

How to Maintain a Good Credit Score?

> Know Your Score

>> Firstly, you’ll need to know your credit score. You can order what is essentially a live broadcast of your credit scores here.

> Pay Bills on Time

>> Be it a credit card or a loan, paying back your debts as agreed is the most important part of maintaining a good credit score. This will also help you build a history of paying your bills on time and keeping your debts low.

> If You’re Struggling Financially

>> If you’re at a low point in life, financially, doesn’t mean your credit score should pay the price. Making only the minimum payment required on each account will keep your credit score where it is and possibly increase it by giving you more on time payment history.

> Stop the Applications

>> In order to maintain a good credit score, the best thing you can do is to avoid applying for new credit cards until you’re stable financially.

You made it this far. Surely you found the information provided in this article informative and are ready to put it to good use. Want to keep learning more about credit? Learn more about what affects a credit score.

I also have articles published covering whether using your credit card helps your credit score, as well as whether paying off your student loan helps your credit score.

I strongly encourage you to check out those articles if you’re truly invested in straightening out not only your credit score, but also your understanding of it.

If you need credit repair, register for our services. Check out our payment structure here and don’t forget to add positive accounts to your credit reports!

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