You may periodically hear recommendations from people advising you to close your open credit accounts. In fact, you might hurt your score more by closing accounts that are currently open. There are a couple reasons for this including:

  • Your credit history may look younger than it actually is when you close open accounts. The scoring model evaluates the age of your oldest account along with the average of all your accounts. Closing accounts especially your aged accounts, can ding your credit score.
  • You total available credit is reduced when you close accounts, which potentially makes your debt utilization % to increase. One of the key components of your credti score is the total amount of credit you use compared to your total available credit.

One of the best decisions you can make is to keep the account open for history. However, if you’re unable to control yourself, consider destroying the physical card so you’re unable to use it.

Category: Credit, Tips

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