Don’t Close A Credit Card Unless…

I closed 3 credit card accounts about 2-3 months ago due to rediculous annual fees and high rates.  2 Accounts were 10-12 months, no lates.  1 was about 14 months no lates.  I noticed my score seemed to drop quite a bit when I closed these.  Can I re-open them and my score will go back up? 

Dustin

——————-

Hello Dustin,

You can try to reopen those lines.  If you are successful in reinstating those tradelines, then your score will definitely bounce back.  The area of FICO that was impacted was Amounts Owed and that represents 30% of your credit score.  It appears [to Fair Isaac] as if you are less creditworthy because you have less credit-card-borrowing-power.

Closing out credit cards are generally viewed as a negative by FICO unless you simultaneously increase the credit line of another existing card.  For an individual that has a large number of credit cards, closing out some credit cards and simultaneously increasing the credit limit of a card that remains open will improve the credit score.

Thanks for the questions and hope this helps.

Paul