Does Closing a Credit Card Hurt Your Credit?

Your credit score is a reflection of how reliable you are financially, and it determines your financial leverage, which means it directly affects your financial standing. Closing a credit card may seem like a solid move, such as in relation to streamlining your debt, but, under some circumstances, doing so can damage your credit. Our experienced fair credit reporting attorney at The Law Offices of Jibrael S. Hindi can help you make the right choices for your situation.

Factors that Can Affect Your Credit Score

The kinds of factors that directly affect your credit score include the following:

• Your payment history
• How much of your available credit are you currently using
• The duration of your credit history
• Your credit mix, such as a mortgage, credit cards, and installment loans
• The amount of new credit you carry

Closing a credit card account can directly affect several of these factors, and your credit score could take a temporary dip.

Considering the Implications of Closing a Card

The Consumer Financial Protection Bureau (CFPB) shares the following two important points in relation to closing a credit card:

• Closing an older account that has a positive payment history attached can cause your credit score to dip.
• Closing a credit card account can cause the percentage of available credit to lessen, which can negatively affect your credit score.

CFPB also notes that the benefits of keeping a credit card account can be outweighed by bad terms or an annual fee. Further, if you don’t plan on applying for additional credit anytime soon, closing a credit card account is unlikely to have a seriously negative impact on your credit score. And it could save you from accumulating more debt than you want to carry.

Not Using the Credit Card Rather than Closing It

The fact is that simply not using your credit card could elevate your credit score, while closing the account could weaken it. It’s also important to note, however, that inactivity could lead to a loss of benefits, usually in the span of from 6 months to a year, and the provider could simply shut your card down. At this point, your available credit will drop while your utilization rate rises, which can lead to a weaker credit score.

Our Experienced Fair Credit Reporting Lawyer is Standing by to Help

Maintaining a high credit score is important to your purchasing power, can save you considerable money in the long run, and can open up a world of financial opportunities. Our focused fair credit reporting lawyer at The Law Offices of Jibrael S. Hindi is well-equipped to help you effectively resolve any credit reporting errors that are affecting you, while helping you make well-considered choices in the process.

We are in your corner, so please don’t put off reaching out for more information about everything we can do to help by contacting us online or giving our firm a call at 844-542-7235 today.