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Romulus2

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Why did my score go down 18 points when one credit card was cancelled due to inactivity?
Every thing else has been paid on time to my knowledge.

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There are many factors that affect your credit score, but the three of them that might have negatively impacted you are: length of credit history, credit utilization, and total accounts.

  • Length of credit history – This is calculated by looking at the average age of all your open accounts. If your card was one of the older cards you had, closing it could have lowered you average history length.
  • Credit utilization – This is calculated by dividing the amount of your utilized (used) credit by your total available credit. If your old card had a high available balance, but was not used it could have been helping you to lower your overall utilization.  Now that it is closed, your utilization is probably higher. Ideally it should not be over 20-30%.
  • Total accounts – This is simply the number total open accounts. It has a lower impact on your score than the other 2 factors, but is something that creditors consider. More open accounts shows a more diversified credit portfolio.

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