All three credit rating companies view it differently. As long as it is closed at Consumer Request, and there is no balance, it should not hurt you.
The previous information is solely for informational purposes only. If you have further questions, please contact an attorney in your area for more specific answers. Responding to your question in no way creates an attorney/client relationship, and none of the specific guarantees of privacy exist. If you have found this information helpful, kindly check the "helpful" box.
Yes, cancelling a card can affect a credit score. No one can really say how many points since the scoring formula is secret. However, cancelling a card can affect the length of your credit history. So, if you have had this card for a long time, you may shorten your overall credit history. Also, by cancelling the card, you may alter your debt to available balance ratio (i.e. credit utilization). For example, if the card has an available balance of $10,000, and your total available balance is $40,000 (for all cards), if you close this card, your total available balance goes to $30,000. Now, if your other cards have a combined debt of $12,000, your credit utilization will go from 30% to 40%, that would be very bad for your credit. Ideal credit utilization is 10% or less, and should never exceed 30%.
Just some things to think about. Other considerations are how frequently you use the card, does it charge an non-use fee, or other annual fee. etc. If a card goes long enough unused, the lender will sometimes close the account anyway.
The formulas used by FICO are proprietary, like the formula for Coke or KFC. But cancelling a card results in a loss of your available credit which will damage your credit score. Cancelling one card out of 10 will have a different result for you than it might for your spouse, as scoring typically is about ratios, not just points. Hope this perspective helps!
This is a great question. I hear people brag about cancelling credit cards a lot. It's not always the best bet, and you were wise to inquire. I agree with Mr. Berkus. While the precise impact on your score varies depends on the scoring model (there are many), and the formula is indeed a trade secret, we do know that a huge factor, regardless of scoring model, is your debt to available credit ratio.
Put another way, if the credit card is not hurting you (i.e., no big annual fee, etc.) it's best not to close it as doing so will decrease your available credit, and drive that important ratio down.
All the best to you.
NOTE: This Answer does not constitute legal advice. Every case is fact specific. To render a legal opinion, an attorney must engage in a consultation with a prospective client and review any pertinent documents. This communication does not create an attorney-client relationship with Attorney Amy L. Wells or WELLS LAW OFFICE, INC.