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How Much Will Your Credit Score Be Hurt by Closing a Credit Card Account

Saturday, May 8, 2010 - 1:02 PM
It's well known that closing a credit card account will hurt your credit score. That's why it's a good idea to make sure all of your credit cards are used at least twice a year. If your credit card company adds an annual fee, you might feel it's necessary to close the account. That's what a FW member decided to do, and he's reporting that his credit score fell from 750 to 640. One thing that can reduce the impact of closing an account is if you have other cards that have high credit limits. This is explained in this Boston Globe article.
1
Ken TuminKen Tumin5,442 posts since
Nov 29, 2009
Rep Points: 123,754
1. Saturday, May 8, 2010 - 5:47 PM
I have to raise the BS Flag...

I had a 15 year Citibank card that I closed due to the annual fee as well recently.

That hit my credit score 8 points but then the 8 points magically reappeared 2 months later.

So, a 90 point drop for one card - I doubt it!!!  Plus, he states that he charged $200k over 10 years, never a balance or paid late!  The past 7 years of that awesome trade line on his credit report does not just go POOF...it slowly erodes, 1 month at a time for the next 7 years.  That ain't no 90 point drop!

So, I fly the BS flag on this...

 

BTW, my credit score is 793 FICO.

 
1
AnonymousAnonymous2,281 posts since
May 9, 2010
Rep Points: 3,789
2. Sunday, May 9, 2010 - 1:52 AM
What happens if you are one of those people fed up by high interest rates on credit cards and had overused them and then decided to close all of the accounts in one big swoop?  I guess after seven years, all of your account information will drop off your credit report and then when you later decide to get a car loan and when the dealer pulls up your report, it has no credit history for you and therefore you get rejected?
1
AnonymousAnonymous2,281 posts since
May 9, 2010
Rep Points: 3,789
3. Monday, May 10, 2010 - 9:27 AM
I agree with Bill who raised the BS flag. Closing one credit card does not cause such a big drop. Most replies in the FatWallet thread also don't believe that was the reason.
1
AnonymousAnonymous2,281 posts since
May 9, 2010
Rep Points: 3,789
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