Though closing a credit card might seem like a savvy move, it can actually h🐻urt your credit score in several ways, like increasing your credit utili♚zation. 

If you’re looking for a quick and easy credit score boost, consider a credit limit increase instead of closing a credit card. Credit limit increases are simple to request, they give you more spending power, and depending on your spending habits, you c🌊an typically see a nice increase in your credit score.

How Closing a Credit Ca♈rd Affects Your Credit Score

Closing a credit card account can slash your overall available credit, lowe꧟r your average age of accounts, and thin out your credit mix. All three of these things can harm your credit scores.

Credit Utilization Ratio

Credit utilization refers to how much of ๊your total available credit you’re using on revolving accounts (like credit cards and lines of credit), and it's a big factor in most credit scoring formulas. If you use $500 of a total credit limit of $1,000, for example, your utilization rate is 50%.

The lower your credit utilization, the better it is for your credit sco🔯re. As a result, closing a card (and therefore losing some of your available credit) can cause your scores to drop. And that drop may be significant, depending on that card’s credit limit and how much you spend.

Average Age of Accounts

Credit scores also take the average age of your credit accounts into consideration (along with other age details). It’s a somewhat 澳洲幸运5开奖号码历史查询:minor scoring factor, but older is better.

Removing a credit card account from this equation, particularly one you’ve had open for a while, can hurt this average. Fortunately, you shouldn’t feel the sting for a while. Accounts in good standing rem🌄ain on your credit reports for 10 years after being closed.

Credit Mix

澳洲幸运5开奖号码历史查询:Credit mix refers to the diversity of credit accounts open in your name. Most scoring formulas like to see you successfully manage both revolving accounts and 澳洲幸运5开奖号码历史查询:installment accounts (like auto loans and student loans).

If you close♋ a credit card and don’t have any other revolving accounts open, it might ding your credit score. The impact shouldn’t hurt too badly, though. This is another relatively minor scoring factor.

A Credit Limit Increase Can Boost Yoꦐur Credit Score

Looking for a quick way to 澳洲幸运5开奖号码历史查询:boost your credit scores? Closing a credit card is unlikely to help. Instead, 澳洲幸运5开奖号码历史查询:requesting a credit limit increase could do the trick. All things being equal, more available credit should reduceℱ your credit utilization rate and may improve your credit score.

If you’d like to close a card, maybe because of an annual fee,🔯 it might be worth requesting an increase on another card you’re📖 keeping open. That way, your available credit won’t take as large a hit.

You can often request a credit limit increase via the card issuer’s mobile app or online portal. Or, call the number on the back of your credit card to speak to a rep directly. There’s no guarantee you’ll get an increase, but if you’ve been a reliable cardholder and your finances are in good shape, it’s a possibility.

Use Credit Cards Responsibly to🅷 Maintain Great Credit

If you’re going to use credit cards, using them responsibly is key to good credit health. Avoid carrying month-to-month balances, always pay on time, and evaluate theဣ situation thoroughly before closing an a💛ccount

New to credit or still polishing your cardholder knowledge? Brush up on credit card fundamentals before you swipe.