Closing store credit cards could affect your credit scores



Dear Experian,

Can closing a few of my department store credit card accounts affect my credit scores if I have established good credit and have high credit scores? My husband wants to eliminate our higher interest rate cards.

-        LTB


Dear LTB,

Closing accounts can affect your credit scores. The extent of the impact depends on your credit history, most importantly your utilization. However, your decision should not be based on credit scores alone.

When you order a copy of your credit score from Experian, you are given a list of credit score factors. These factors tell you what is currently having the most effect on your scores.

Unless your score factors are indicating that you have too many open credit card accounts, it may be best to close them. If your factors indicate your balance-to-limit ratio, or utilization, is too high then it would be better for your scores to leave them open, especially if you are planning to apply for credit in the near future.

Don’t make a decision based solely on credit scores, though. Instead, consider your overall financial situation. If you are paying an annual fee or leaving the accounts open means you or your spouse will be tempted to use them, then it may be worth it to close them in order to avoid accumulating high interest debt. If you have a solid credit history, your scores may still be high enough even if you close the accounts.

Keep in mind that you and your husband have separate credit reports and separate credit scores, so the score factors may be different for each of you. You can order your scores online at http://www.experian.com/consumer-products/vantage-score.html.

Thanks for asking.

Maxine Sweet
Vice President, Public Education

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