Closing a credit card usually lowers your credit score, at least temporarily, because it reduces the total credit available to you and may increase how much of your available credit you are using.
The drop happens because credit scoring models care about two things: how much credit you have access to, and what percentage of it you are actually using. When you close an account, you lose the credit limit on that card. If you still carry balances on other cards, your credit utilization ratio — the percentage of available credit you are using — goes up. A higher utilization ratio signals risk to lenders and costs you points.
The size of the drop depends on how much credit you were using before you closed the card. If the card had a high limit and you were not using much of it, closing it will hurt more than closing a card with a low limit that you were maxing out.
Key Takeaways
- Closing a credit card reduces your total available credit, which usually raises your credit utilization ratio and lowers your score.
- The damage is smaller if the card had a low limit, if you were already using most of its credit, or if you have other cards with high unused limits.
- The score drop is often temporary — it may recover within a few months if you keep other accounts in good standing and do not take on new debt.
- Closing a card also removes its payment history from your active accounts, which can affect the age of your credit history over time.
- If you want to close a card without hurting your score as much, pay down balances on other cards first so your utilization stays low.
Why credit utilization matters more than you might think
Credit utilization is the second-most important factor in most credit scoring models, after payment history. A utilization ratio below 30 percent is considered healthy; above 50 percent starts to signal risk.
When you close a card, the math changes immediately. Say you have two cards: one with a $5,000 limit and one with a $3,000 limit, and you are carrying a $2,000 balance on the first card. Your total available credit is $8,000, and you are using $2,000 of it — a 25 percent utilization ratio. If you close the $3,000 card, your available credit drops to $5,000, and your utilization jumps to 40 percent. That shift alone can lower your score by 10 to 50 points, depending on your overall credit profile.
How the age of your accounts plays into the damage
Closing a card also affects the average age of your credit accounts. Older accounts help your score because they show a long history of managing credit. When you close an account, it stops being counted as an active account, though it usually stays on your credit report for seven to ten years.
The impact is smaller if you have several other accounts that are older, or if the card you are closing is relatively new. But if the card you are closing is one of your oldest accounts, the average age of your remaining active accounts drops, and your score may fall a bit more.
When the score drop is temporary and when it might linger
Most credit score drops from closing a card recover within three to six months if you keep your other accounts in good standing and do not take on new debt. The closed account stops affecting your utilization ratio calculation once it is no longer active, and the damage fades as newer positive payment history accumulates.
The recovery is slower if you close the card while carrying high balances on other accounts, or if you apply for new credit shortly after closing it. Each new credit inquiry and new account also lowers your score temporarily, so closing a card and then opening a new one in quick succession compounds the damage.
Strategies to minimize the score hit if you need to close a card
If you have decided to close a card and want to protect your score, pay down balances on your other cards first. The goal is to lower your overall utilization ratio before you close the account, so the loss of available credit does not push you into a higher utilization bracket.
For example, if you are carrying $3,000 in balances across multiple cards and you have $10,000 in total available credit, your utilization is 30 percent. If you pay down to $2,000 in balances before closing a card with a $2,000 limit, your utilization stays at 20 percent even after you close it. The score hit will be much smaller.
Another option is to keep the card open but stop using it. You do not have to close an account to stop charging on it. Keeping it open preserves your available credit and your account age, and it costs nothing if there is no annual fee. Many people close cards unnecessarily when simply not using them would protect their score.
What happens to the closed account on your credit report
A closed account stays on your credit report for seven to ten years, depending on whether it was in good standing when you closed it. During that time, it still shows your payment history, but it no longer counts toward your available credit or your active account count.
If you closed the account in good standing — meaning you had no late payments and paid it off or paid it down before closing — it will continue to help your score by showing responsible credit management. If you closed it with a balance or a history of late payments, it will continue to hurt your score, and closing it does not erase that damage.
Frequently Asked Questions
How much will my score drop if I close a credit card?
The drop usually ranges from 10 to 50 points, depending on the card's credit limit, how much you were using it, and your overall credit profile. Cards with high limits that you were not using much cause bigger drops. The impact is smaller if you have other cards with high unused limits or if you pay down balances on other cards first.
Should I close a credit card I am not using?
Probably not, unless it has an annual fee. Keeping it open preserves your available credit and your account age, both of which help your score. You can simply stop using it without closing it. If you do close it, do so during a time when you are not planning to borrow money, since the score drop may affect your rates on new loans.
Will my score recover after I close a card?
Usually, yes. Most score drops recover within three to six months if you keep other accounts in good standing and do not take on new debt. The recovery is faster if you close a newer card or a card with a low limit, and slower if you close an old card or one with a high limit.
Does it matter which credit card I close?
Yes. Closing a card with a high limit hurts more than closing one with a low limit. Closing an old card hurts more than closing a new one. Closing a card you were using heavily hurts less than closing one you were barely using. If you must close a card, close the newest one with the lowest limit that you were using the most.
Can I reopen a credit card after I close it?
It depends on the card issuer. Some will reopen a recently closed account if you ask, though it may be treated as a new account for scoring purposes. Others will not reopen closed accounts at all. If you think you might want the card back, call the issuer before closing it and ask whether reopening is possible.