Credit Myth Of The Day

Closing the credit cards that you don’t use will help boost your score…False!

It is a common myth that closing unused credit card accounts will be good for your credit score. In fact, it will actually hurt your credit score. It can negatively affect your credit score in two ways.

1. A large chunk of your credit score is determined by your utilization ratio. This ratio is created by comparing your credit in use to your available credit. Simply put, if you had only 1 credit card with a $1000 limit and you had a balance on the card of $900, your would be using 90% of your available credit. The closer you get to maxing out your cards and using a large percentage of your available credit, your credit score would be negatively impacted. For the sake of the credit score, it is best to keep your balances as low as possible.

When you close unused credit cards, you eliminate available credit. By eliminating available credit, you would likely increase your utilization ratio and negatively affect your credit score.

2. Another factor in determining your credit score is the history of your accounts. 3 years of history on a credit card gives a better idea of how you pay your bills than 3 months will. Because of this, the longer your history the better your score will be. When you close credit card accounts, you will eliminate this history. If you really are uncomfortable keeping unused credit card accounts open, close the accounts you have had for the least amount of time keep open the accounts you have had for a number of years.

2 Responses

  1. Thanks for your write-up. I would like to say that the first
    thing you will need to carry out is to see if you really need fixing credit.
    To do that you need to get your hands on a duplicate of
    your credit score. That should never be difficult,
    because the government mandates that you are allowed
    to receive one free copy of your real credit report annually.

    You just have to check with the right folks. You can either find out
    from the website for the Federal Trade Commission or perhaps contact
    one of the leading credit agencies straight.

    1. It is true that everyone is entitled to one free credit report once a year from each of the 3 marjor credit bureaus, Experian, Equifax and Trans Union. You can get your free credit report at While you can get your credit report, it does not come with your credit score. You actually have to pay if you would like to get your score along with the report. The bureaus typically charge between $6 and $12 dollars for the score. However, you do not have to purchase your score in order to get the credit reports.

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