Closing a credit card usually lowers your score, but the damage depends on how much credit you're using and how long you've held the card
When you close a credit card, your credit score typically drops. The size of the drop varies — it might be 5 points or 50 points, depending on your situation. The main reason is that closing an account changes two of the five factors that make up your score: your credit utilization ratio (how much of your available credit you're using) and the age of your credit history.
If you're carrying balances on other cards, closing an account shrinks your total available credit, which makes your utilization ratio worse. If the card you're closing is your oldest account, it can lower the average age of your accounts. Both of these changes push your score down. The effect is temporary — your score will recover over time as you pay down balances and build new credit history — but the when ready hit is real.
Key Takeaways
- Closing a credit card reduces your available credit, which raises your utilization ratio and typically lowers your score by a few points to several dozen points.
- If the card you're closing is your oldest account, your average account age drops, which also hurts your score.
- The damage is usually temporary and recovers within a few months as you continue paying bills on time and paying down balances.
- If you want to close a card without harming your score as much, pay off any balance first and close it when your other accounts are in good standing.
How credit utilization changes when you close an account
Your credit utilization ratio is the percentage of your total available credit that you're currently using. If you have $10,000 in available credit across all your cards and you're carrying a $2,000 balance, your utilization is 20 percent. Credit scoring models treat lower utilization as a sign of responsible credit use.
When you close a card, you lose the available credit on that card. If you close a card with a $5,000 limit and no balance, your total available credit drops from $10,000 to $5,000. If you still have that $2,000 balance on another card, your utilization ratio jumps from 20 percent to 40 percent. That change alone can lower your score. The higher your utilization ratio climbs, the bigger the damage.
This is why closing a card hurts less if you've already paid off the balance. It's also why closing a card hurts more if you're carrying balances on your remaining cards. If you're planning to close an account, paying down balances on your other cards first will reduce the impact.
The effect of account age on your score
Credit scoring models reward you for having a long credit history. The longer your accounts have been open, the better. Your score includes a factor for the average age of all your accounts — if your oldest account is 15 years old and your newest is 1 year old, your average might be around 8 years.
When you close your oldest account, that account eventually stops counting toward your average age. The timing varies by scoring model and credit bureau, but the effect is the same: your average account age drops. This is a smaller factor than utilization, but it still moves your score downward.
If the card you're closing is relatively new (less than a year old) or if you have several accounts older than it, closing it will have almost no effect on your average age. If it's your oldest account by several years, the impact will be more noticeable.
When closing a card does the least damage
You can reduce the score impact by timing the closure carefully. Close the card when your utilization ratio is lowest — ideally after you've paid off balances on your other cards or when you're carrying very little debt overall. A utilization ratio below 10 percent means closing an account won't push you into a higher, more damaging range.
Close the card when your credit report is otherwise strong: you're paying all bills on time, you have no recent late payments, and you have other accounts in good standing. Your score is more resilient when the rest of your credit behavior is solid. If you're planning a major purchase that requires a mortgage or auto loan within the next few months, close the card after that purchase, not before.
Avoid closing multiple cards at once. Each closure has an impact, and closing several accounts in a short period compounds the damage and can raise red flags with lenders. If you need to close more than one account, space them out by several months.
What happens to your score after you close the card
The score drop is not permanent. As time passes, the closed account becomes less relevant to your score. Your utilization ratio will improve as you pay down balances on your remaining cards. Your average account age will stabilize — the closed account will eventually age off your report entirely (typically after seven to ten years), but its impact on your average age decreases over time as your other accounts get older.
Most people see their score recover within three to six months of closing an account, assuming they continue paying bills on time and keeping balances low. The recovery is faster if you close the card when your utilization is already low and you have other accounts with long histories.
Alternatives to closing a card
If you want to stop using a card but don't want to close it, you can straightforward leave it open with a zero balance. This keeps your available credit in the calculation, which helps your utilization ratio. It also preserves the account age. The only downside is that the card issuer might close the account for inactivity if you don't use it for a long time — typically 12 months or more, though this varies by issuer.
If you're concerned about inactivity closure, use the card occasionally for a small purchase and pay it off when ready. This keeps the account active without carrying a balance. Some people use an old card for a single recurring charge — a streaming service or a small subscription — and set up automatic payment to keep the account in use.
If the card has an annual fee and you want to avoid paying it, call the issuer and ask if they can waive the fee or convert the card to a no-fee version. Many issuers will do this to keep your account open, especially if you've been a long-term customer with good payment history.
Frequently Asked Questions
How much will my score drop if I close a credit card?
The drop depends on your situation. If you're carrying balances on other cards, closing an account might lower your score by 20 to 50 points or more. If you have very low utilization and the card isn't your oldest account, the drop might be just a few points. There's no way to predict the exact number without knowing your full credit profile.
Should I close a credit card before or after explore for a loan?
Close it after. Lenders pull your credit report when you explore, and a recent account closure or a drop in your score can hurt your chances of approval or the interest rate you receive. If you're planning to explore for a mortgage or auto loan, wait until after you've been approved and the loan has closed before closing any credit cards.
Will closing a card hurt my score if I have no balance on it?
Yes, but less than if you had a balance. Closing a zero-balance card still reduces your available credit and affects your average account age. The damage is smaller because your utilization ratio won't worsen, but the account age factor still applies.
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 within a short window — typically 30 to 60 days. Others will treat a reopened account as a new account, which resets the account age. Call the issuer before closing if you think you might want to reopen it, and ask what their policy is.
Does closing a card remove it from my credit report?
No. A closed account stays on your credit report for seven to ten years (depending on whether it was in good standing or had negative marks). During that time, it still affects your score, though its impact decreases over time. After it falls off your report, it no longer affects your score at all.