Question about cancelling a credit card

**PlainCash4** · 09-22-2011, 07:08 PM

About 2 months ago i got a Discover Card. I don't like being too spread out so i cancelled my MAster Card after i paid it off. My question is , Does cancelling a credit card affect your credit score? I've been told it does, but how much ? Is you FICO score THAT important ??

**ubumartin** · 09-22-2011, 07:25 PM

I think it has something to do with debt to credit ratio. The best thing to do is keep it open but don't use it. I think creditors like to see that you have a higher credit limit but don't use it???? Not exactly sure but that is how I have understood it when listening to money shows. So I would say research it so if the situation comes up again you will have the best information. Good luck.

**PlainCash4** · 09-22-2011, 07:29 PM

Thanks ubumartin. I already closed the master card , but the Discover has large credit limit on it. I figure with no debt, it can't be all that bad...lol.

**mndtrp** · 09-22-2011, 10:25 PM

It's a lot of guesswork, since the credit score agencies haven't released how they come up with the scores. That said, it is related to your debt to income ratio is part of it. Length of accounts and payment history is also important. If you were concerned with your score, it would have been better to keep the card open, but unused (except for whatever it takes to keep any annual fees at bay). I have a card I use twice a year, but only really keep around because I've had it for 11 years, my longest card.

Ultimately, if you aren't planning on applying for a loan anytime soon, it isn't going to matter much. Even if you are, closing one account isn't likely going to affect you in a major way.

**PlainCash4** · 09-23-2011, 09:19 PM

thank you mndtrp.

I searched online and from what i can understand, my credit score will probably drop 10 points ( if at all ). It had a low credit limit and my new one has a much higher limit. I don't even care about my credit score as long as its decent. I just thought the whole idea of it affecting my score was silly. OH well :^)

**monkeywrangler71** · 09-23-2011, 10:34 PM

I think the main issue with closing it is related to length of account history more so than debt utilization ratio. The impact on your score is going to vary depending on where your score was to begin with - apparently small things have a bigger impact on high scores than they do on low scores. But if you do have a high score, no one is going to care about these little fluctuations due to silly things anyway. It would only matter if you were trying to massage your score up into a range that makes you eligible for credit (and/or rate reductions, etc.).