Closing a credit card usually lowers your credit score, at least temporarily, because it reduces the total credit available to you and may raise the percentage of credit you are using.
The drop is not automatic or permanent. Your score falls because credit scoring models reward you for having unused credit lines open. When you close an account, that unused credit disappears from the calculation, even though you have not borrowed any more money. The effect is strongest if the card you are closing has a high credit limit or if you carry balances on your other cards.
The timing and size of the drop depend on which scoring model is being used, your overall credit history, and how much credit you have in use elsewhere. Some people see a 10-point dip; others see 50 or more. The score typically recovers within a few months if you keep paying other accounts on time and do not max out remaining cards.
Key Takeaways
- Closing a card reduces your total available credit, which raises your credit utilization ratio — the percentage of your credit limit you are actually using — and that ratio is a major factor in your score.
- The damage is worse if the card you are closing has a high limit, if you carry balances on other cards, or if you have few other open accounts.
- Your score usually recovers within three to six months if you continue paying bills on time and keep other card balances low.
- Closing a card does not erase your payment history with that card, so the account will continue to help your score for years even after it is closed.
- If you want to close a card without hurting your score as much, pay down balances on other cards first so your utilization ratio stays low.
Why Available Credit Matters to Your Score
Credit scoring models look at how much of your available credit you are actually using. This is called your credit utilization ratio. If you have $10,000 in total credit limits across all your cards and you are carrying $3,000 in balances, your utilization is 30 percent. Most scoring models prefer to see this ratio below 30 percent.
When you close a card with a $5,000 limit, your total available credit drops to $5,000. If your balances stay the same at $3,000, your utilization jumps to 60 percent. The model now sees you as using more of your available credit, which signals higher risk, so your score drops. You have not borrowed any additional money — your behavior has not changed — but the math has shifted against you.
This is why closing a card with a high limit or a zero balance hurts more than closing a card you rarely used. The card with the zero balance was doing work for you by sitting there unused.
When the Damage Is Worst
The score drop is largest if you are closing a card that represents a big chunk of your total credit. If you have three cards with $5,000 limits each and you close one, you lose one-third of your available credit. If you have ten cards with $5,000 limits each and you close one, you lose only one-tenth.
The damage is also worse if you carry balances on your remaining cards. If you have $8,000 in balances and $20,000 in total limits, closing a $5,000-limit card brings your total limits down to $15,000, pushing your utilization from 40 percent to 53 percent. That is a meaningful jump that will show up in your score.
Closing a card also hurts more if it is one of only a few accounts you have open. Credit scoring models reward you for managing multiple types of credit — credit cards, car loans, mortgages. If closing a card leaves you with very few open accounts, the model has less information to work with, and your score may drop more sharply.
How Long the Drop Lasts
The score hit is usually temporary. Most people see their score recover within three to six months if they continue paying other bills on time and do not increase balances on remaining cards. Some see recovery in as little as one or two months; others take longer depending on how much damage was done and how active their credit file is.
The recovery happens because credit scoring models are forward-looking. They care most about your recent behavior. As time passes and you keep making on-time payments and keeping utilization low, the closed account becomes less important to the calculation. Your score gradually climbs back.
If you close a card and then when ready max out your remaining cards, the recovery will take much longer or may not happen at all. The model will see you as taking on more risk, and your score will stay depressed.
The Payment History Stays on Your Record
Closing a card does not erase the payment history you built with that card. The account will remain on your credit report for seven to ten years after you close it, and during that time it continues to help your score because it shows a long history of on-time payments.
This is why closing an old card with a perfect payment record is often worse than closing a newer one. The old card has been helping your score for years by showing stability and reliability. Once you close it, you lose the benefit of its available credit, but you keep the benefit of its history — at least for a while. After seven to ten years, the account falls off your report entirely and stops helping your score.
If you have a card with a poor payment history — late payments, high balances, defaults — closing it will eventually help your score because the account will age off your report faster. But the when ready effect of closing any card is still a utilization ratio that gets worse.
Steps to Minimize the Score Drop
If you have decided to close a card and want to protect your score as much as possible, pay down balances on your other cards first. If you can bring your utilization ratio below 10 percent before you close the card, the closing will have much less impact. You are essentially creating room in your utilization budget before you remove available credit.
Call the card issuer and confirm that closing the account will not trigger any fees or penalties. Some cards charge an annual fee even if you are not using them; closing stops that charge. Ask the issuer to note in your file that you are closing the account in good standing, though this is mostly a courtesy and does not affect your score.
Do not close multiple cards at once. If you need to close more than one, space them out by several months. This spreads the utilization hit across time and gives your score a chance to recover between closings.
After you close the card, do not open new cards to replace the lost credit. Opening a new card triggers a hard inquiry and lowers your score in the short term. Wait at least six months after closing a card before you open a new one, if you decide to open one at all.
Alternatives to Closing a Card
If you are closing a card mainly because you do not use it, consider keeping it open instead. There is no harm in having an unused card sitting in a drawer. It costs you nothing if there is no annual fee, and it continues to help your score by keeping your utilization ratio low.
If the card has an annual fee and you do not use it, call the issuer and ask if they will waive the fee or downgrade you to a no-fee version of the card. Many issuers will do this to keep your account open. This solves the fee problem without the score hit.
If you are closing a card because you are trying to simplify your finances or reduce temptation to overspend, that is a valid reason. In that case, the score drop is a trade-off you are making for peace of mind. It is temporary, and your score will recover. But if you are closing a card solely because you think it will help your score, keeping it open is usually the better choice.
Frequently Asked Questions
How much will my score drop if I close a credit card?
There is no fixed amount — it depends on the card's credit limit, your total available credit, how much you are currently using, and which scoring model is being used. Most people see a drop of 10 to 50 points, but some see more or less. The drop is usually temporary and recovers within a few months.
Should I close a credit card before explore for a mortgage?
No. Closing a card lowers your score, which can hurt your mortgage rate or your odds of approval. If you are planning to explore for a mortgage, keep all your cards open and pay down balances instead. Wait until after the mortgage closes to close any cards.
Does closing a card hurt my credit if I have paid it off?
Yes. Even if the card has a zero balance, closing it removes available credit from your file, which raises your utilization ratio. A paid-off card with a zero balance is actually helping your score by sitting there unused, so closing it will still cause a temporary drop.
Can I reopen a credit card after I close it?
It depends on the issuer. Some will reopen a recently closed account if you call and ask within a short window, usually 30 to 60 days. Others will not. If you think you might want the card back, call the issuer before you close it and ask what their policy is.
Will closing a card affect my ability to get approved for new credit?
It may, because your credit score will be lower for a few months after closing. If you are planning to explore for a car loan or another credit card soon, close any cards after you have finished explore. If you need to close a card now, wait three to six months before explore for new credit to give your score time to recover.