Though closing a credit card might seem like a savvy move, it can actually hurt your credit scor💎e in several ways, like increasing your credit utilization. 

If you’re looking for a quick and easy credit score boost, consider a credit limit increase instead of closing a credit card. Credit limit increases are simple to request, they give you more spending power, and depending on your spending habits, you can typically se༺e a nice increase in your credit score.

How Closing𝕴 a Credit Card Affects Your Credit Score

Closing a credit card account can slash your overall available credit, lower your average age of accounts, and thin out your credit mix🅷. All three of these things can har🙈m your credit scores.

Credit Utilization Ratio

Credit utilization refers to how much of your total available credit you’re using on revolving accounts (like credit cards and lines of credit), and it's a big factor in most credit scoring formulas. If you use $500 of a total credit limit of $1,000, for 💙example, your utilization rate is 50%.

The lower your credit utilization, the better it is for your credit score. As a result, closing a card (and therefore losing some of your available credit) can cause your scores to drop. And that drop may be sig♛nificant, dep💞ending on that card’s credit limit and how much you spend.

Average Age of Accounts

Credit scores also take the average age of your credit accounts into consideration (along with other age details). It’s a somewhat 澳洲幸运5官方开奖结果体彩网:minor scoring factor, but older is better.

Removing a credit card account from this equation, particularly one you’ve had open for a while, can hurt this average. Fortunately, you shouldn’t feel the sting for a while. Accounts in good standing remain on your credit reports for 10 years after ꦰbeing closed.

Credit Mix

澳洲幸运5官方开奖结果体彩网:Credit mix refers to the diversity of credit accounts open in your name. Most scoring formulas like to see you successfully manage both revolving accounts and 澳洲幸运5官方开奖结果体彩网:installment accounts (like auto loans and student loans).

If you close a credit card and don’t have any other revolving accounts open, it might ding your credit score. The impact 🦂shouldn’t hurt to✃o badly, though. This is another relatively minor scoring factor.

A Credit Limit Increase Can Boost Your Credit Sc𓃲ore

Looking for a quick way to 澳洲幸运5官方开奖结果体彩网:boost your credit scores? Closing a credit card is unlikely to help. Instead, 澳洲幸运5官方开奖结果体彩网:requesting a credit limit increase could do the trick. All things being equal, more available credit should reduc🍒e your credit utilization rate and may improve your credit score.

If you’d like to close a card, maybe because of an🐈 annual fee, it might be worth requesting an increase on another card you’re keeping open. That way, your available credit won’t take as large a hit.

You can often request a credit limit increase via the card issuer’s mobile app or online portal. Or, call the number on the back of your credit card to speak to a rep directly. There’s no guarantee you’ll get an increase, but if you’ve been a reliable cardholder and your finances are in good shape, it’s a possibility.

Use Credit Cards Responsibly to Maintain Great 🅺Credit

If you’re going to use credit cards, using them responsibly is key to good credit health. Avoid carrying month-to-month balances, always pay 🧸on time, and evaluate the situation t൲horoughly before closing an account

New to credit or still polishing your cardholder knowledge? Brush up on credit card fundamentals before you swipe.