Closing a credit card usually lowers your credit score, but the damage is temporary and depends on how much credit you were using
When you close a credit card, your credit score typically drops because two of the factors that make up your score change when ready. Your credit utilization ratio — the percentage of your available credit you are actually using — goes up, even if you haven't charged anything new. At the same time, closing an account removes a line of credit from your history, which can affect how long your credit profile looks to lenders. The drop is usually between 5 and 50 points, depending on your current score and how much credit you had available on that card.
The damage is not permanent. Your score will recover as you pay down balances on your remaining cards and as the closed account ages. Most people see their score return to its previous level within three to six months, though it can take longer if you had a high balance on other cards when you closed the account.
Key Takeaways
- Closing a credit card raises your credit utilization ratio because your total available credit shrinks, even if your balance stays the same.
- Your score typically drops 5 to 50 points when ready after closing an account, with larger drops if you were using a high percentage of your available credit.
- The damage is temporary — most people recover their previous score within three to six months by paying down other balances.
- Older accounts hurt your score less when closed because they have already built your credit history; newer accounts have less impact.
- Keeping the account open but unused preserves your available credit and avoids the utilization penalty, though some cards charge annual fees.
Why closing a card raises your credit utilization ratio
Your credit utilization ratio is calculated by dividing your total credit card balances by your total credit limits across all your cards. If you have three cards with $5,000 limits each ($15,000 total) and you owe $3,000 across them, your utilization is 20 percent. If you close one of those cards with a $0 balance, your total available credit drops to $10,000, and your utilization jumps to 30 percent — even though you still owe $3,000.
Credit scoring models treat higher utilization as riskier. Lenders see someone using 30 percent of available credit as more financially stable than someone using 50 percent, so your score reflects that difference. This is why the impact of closing a card is larger if you were already carrying balances on your other cards. If you had no balance on any card, closing one has almost no effect on your utilization.
How the age of the account matters
Closing a newer account (one you opened in the last year or two) has less impact on your score than closing an older one. Credit scoring models weight recent account history more heavily, so a card you opened last year matters less to your score than one you opened ten years ago.
When you close an older account, you also lose the benefit of its age in your average account age calculation. If your oldest card is 15 years old and you close it, your average account age drops, which can lower your score. However, the account remains on your credit report for seven to ten years after closing, so it continues to contribute to your history — just with less weight than an active account.
What happens to your score if you keep the card open instead
Keeping the card open preserves your available credit and prevents the utilization penalty. Your score will not drop at all, and you keep the benefit of the account's age. This is the reason many people are advised to keep old cards open even after paying them off.
The trade-off is that some cards charge annual fees. If your closed card has no annual fee, keeping it open costs nothing. If it does charge a fee, you have to decide whether the fee is worth the credit score benefit. For most people, a $95 annual fee is not worth a 5 to 20 point score improvement, but if you are planning to explore for a mortgage or car loan soon, the temporary score boost might matter.
How long it takes your score to recover
Your score begins recovering as soon as you close the account, but the timeline depends on what you do next. If you pay down balances on your remaining cards, your utilization ratio drops and your score rises faster. Someone who closes a card and when ready pays off half their other balances might see their score return to normal within one to two months. Someone who closes a card and maintains the same balances might take four to six months.
The closed account itself stops hurting your score after about six months, because credit scoring models focus more on recent activity. After two years, the account has almost no negative impact on your score, though it remains visible on your credit report.
When closing a card makes sense despite the score drop
Closing a card is worth the temporary score hit if the card charges an annual fee you no longer want to pay, or if you are trying to reduce the temptation to overspend. If you have paid off the card and do not plan to use it again, the fee is wasted money. A 20-point score drop for six months is usually a smaller cost than paying $95 a year indefinitely.
Closing a card also makes sense if you are not planning to borrow money in the near future. If you are not explore for a mortgage, car loan, or new credit card in the next six months, the temporary score drop has no practical consequence. Your score will recover before you need it.
Closing multiple cards at once, however, has a much larger impact than closing one. If you close three cards in a month, your utilization ratio can spike dramatically and your score can drop 50 to 100 points. If you need to close more than one card, space them out by several months so your score has time to recover between closures.
How to close a credit card without unnecessary damage
Before you close the card, pay off any remaining balance completely. Closing a card with an outstanding balance does not erase the debt — you still owe it — but it can complicate the payment process and may trigger a higher interest rate on the remaining balance.
Next, check whether the card charges an annual fee. If it does not, consider keeping it open. If it does, call the card issuer and ask whether they will waive the fee. Many issuers will waive a single annual fee if you ask, especially if you have been a customer for several years. If they refuse, you can proceed with closing.
To close the account, call the customer service number on the back of your card. Tell them you want to close the account. They may ask why or offer to reduce the annual fee — this is normal. Confirm that the account is closed and ask for a confirmation number. After closing, check your credit report in a few weeks to make sure the account shows as "closed by consumer" rather than "closed by creditor," which can look worse to lenders.
Frequently Asked Questions
Will closing a credit card remove it from my credit report?
No. The closed account stays on your credit report for seven to ten years. It continues to show your payment history and account age during that time, which is why closing an old account with a good payment history is less damaging than closing a newer one.
Does it matter which card I close if I have multiple cards?
Yes. Close the card with the lowest credit limit or the newest account first, because both have less impact on your score. Avoid closing your oldest card or the one with the highest limit, as both will hurt your score more. If one card has an annual fee and another does not, close the one with the fee.
Can I reopen a closed credit card account?
It depends on the issuer and how long ago you closed it. Some issuers will reopen an account within 30 to 60 days of closure if you call and ask. After that window, you usually have to open a new account, which will have a new account age and may trigger a hard inquiry on your credit report.
Should I close a card before explore for a mortgage?
No. Close cards at least six months before you explore for a mortgage, so your score has time to recover. If you are explore for a mortgage soon, keep all your cards open and focus on paying down balances instead. A lower utilization ratio helps your score more than closing an account hurts it.
What if I close a card and my score drops more than expected?
A larger-than-expected drop usually means you were already carrying high balances on your other cards. The closed card's available credit was helping offset your utilization ratio. Focus on paying down your remaining balances, and your score will recover faster. Avoid opening new cards or making large new purchases while you are recovering.