 TITLE: Why Credit Card Companies Close Accounts Without Telling You CONTENT: How a Closed Credit Card Account Impacts Your Credit\n----------------------------------------------------\nEven if you rarely used it, an account being closed has the potential to have some major impacts on your credit.\n### Credit Utilization\nOne of the most important ways an account closure can affect your credit is if it causes your credit utilization rate to spike. Your credit utilization indicates how much of your available credit you're using at any given time, and a lower utilization is better for your credit score.\nIf a card is canceled, you lose access to that available credit, and your credit utilization rate will increase if you have balances on other credit cards.\nFor example, let's say you have a $0 balance on a card with a $10,000 limit and a $2,500 balance on a card with a $5,000 limit. Your overall credit utilization rate between the two cards is roughly 17%. But if the card with the $10,000 limit is closed, your overall utilization rate jumps to 50%.\nKeeping your utilization in the single digits can help you achieve an excellent credit score.\n### Positive Payment History\nIf you've had a credit card account in good standing on your credit report for several years, the account's positive history can help improve your score. If that account gets closed while it was in good standing, it'll stay on your credit reports for up to 10 years, but it won't carry as much weight as an open account would.\nFurthermore, closure of the account means no additional on-time payments will be added to the account, which can hamper your progress improving your credit score—especially if it's one of only a few accounts you have in your name.\nIf there were negative items on the account, such as late payments, those will remain on your report for seven years.\n### Length of Credit History\nThe longevity of your accounts also factors into your credit score. Credit scoring models look at the age of your newest account, as well as the average age of your accounts. If all of your other accounts on your credit report are newer, the dropping off of a much older one can ding your score. If you have to open a new account to replace the closed account, this can have an added effect.\n### Credit Mix\nIf you only have one credit card, losing it could impact your credit mix. This score factor considers how many different types of credit you have—installment loans and credit cards, for instance. If you have multiple credit cards, though, having one closed may not have much of an impact on this credit score factor. END