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queenienbean

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does your credit rating go down when you close an account you don't use that has a zero balance

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that depends

Helpful to 32 out of 34 people

This depends on your current available credit and credit utilization. If you have a lot of available credit and low utilization, and dropping the card means you still stay below 10% utilization, then you most likely will not see a chance in score. Also, this might lower your average age of credit history, which will lower your score (medium impact). To be honest, the reduction in score might not even be that bad.

Last year, I closed a CapOne card because it was an old card I had since 2000, which had no rewards or benefits whatsoever, and a $75 annual fee. The credit limit was $1000 on it. My total available credit at the time of closing the account was approximately $55k. A few months after I closed it, my score dropped 6 points on average because of the reduction in average age of credit history. A few months after that, Chase (Sapphire) and AMEX (Blue Preferred) offered me a free credit limit increases. Now my score is about 20 points higher than it was. To me, this was worth cancelling the account and not paying $75 per year for no benefits and rewards except for the sentimental value that it was my first credit card in my first year of college. Good riddance.

Top Contributor
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YES!!

Helpful to 19 out of 22 people

Say the account is a credit card with a $1000 credit limit and it's with a local store.  You have four other cards and each has a $1000 credit limit, so you have total available credit of $5000.  Now this store card you don't want to use any more because the customer service at that store has sunk to record lows.  But, if you close that card, you remove $1000 available credit from your total and that will hurt your credit score.

Keep the card in a locked file and there is the possibiity the store may eventually close it due to inactivity.(which may bite your credit score a bit for a short while) or they may keep it active for several more years, which keeps your score up, and you don't want to deliberately do anything that may lower your score.

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It depends

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If credit line has never been used. Before dropping it buy something on it thats medium credit limit on the card and don't pay it off till you get a statement with it as balance. Because if you close it prior to doing that lenders may figure you have more credit than you actually use which regardless of points is a negative. Your points only go so far your spending habbits is what matters. To many unused cards in your closed account history can hurt you with the better lenders. So use card for something you would normally pay cash for and after statement pay it off. That balance will remain on your credit report for seven to ten years. Advice from lesson learned I have to many unused closed accounts lenders have told me I dont use enough credit.

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