 TITLE: Will Closing a Credit Card Hurt Your Credit? CONTENT: How Closing a Credit Card Will Affect Your Credit Score\n-------------------------------------------------------\nClosing a credit card can affect your credit score for a few different reasons.\nFor starters, when you close a credit card account, you lose the available credit limit on that account. This makes your credit utilization ratio, or the percentage of your available credit you're using, jump up—and that's a sign of risk to lenders because it shows you're using a higher amount of your available credit. Experts recommend that you keep your utilization rate under 30%, and in general, the lower the rate, the better. To calculate your credit utilization ratio, divide the total of all your credit card balances by the total of all your credit limits; your resulting percentage is your utilization ratio.\nClosing a credit card can also affect your score because it can lower the average age of accounts on your credit report, especially if it's an account that's been open for a long time. The age of your accounts is factored into your credit score, with longer payment histories bolstering your credit score. This shouldn't cause immediate concern, however, since accounts closed in good standing stay on your credit report for 10 years and are factored into credit scores the entire time they remain. Closed accounts that have missed payments associated with them will remain on your credit report for seven years.\nWhile your scores may decrease initially after closing a credit card, they typically rebound in a few months if you continue to make your payments on time. It becomes evident that you just closed an account and didn't take on new debt, but it can take some time. So don't cancel a credit card if you plan to apply for other credit, such as a mortgage or auto loan, in the next few months. END