Does it Affect Your Credit Rating When You Close a Credit Card Account?

Your FICO credit rating gives potential lenders an idea of how you repay debt and what kind of financial risk you may be. All aspects of your credit history, including closing a credit card account, can affect your credit rating.

Effects

Having too many credit card accounts can hurt your credit rating. But closing an account can never raise your credit rating, and will lower it in most cases, according to MSN Money.

Available Credit

Your credit score takes into account how much credit you have available and what percentage of it you're using. So when you close a credit card account, you decrease the amount of available credit you have. That in turns increases the percentage of credit you're using.

Old Account

Part of your credit rating is based on the average age of your credit card accounts, so closing an account you've had for several years could slightly affect your credit rating. The old account information usually stays on your credit report for 10 years, but will drop off sooner if the credit card company deletes the record. When the account drops off your credit report, it decreases the average age of your accounts.