Originally Posted by
pharmawalk
With all respect, I think the above statement is absolutely incorrect. Cards being closed isn't a negative factor. Cards are closed by one's initiation all the time. Likewise, cards get closed by the issuer for non-use all the time. I have over an 800 FICO score and have plenty of accounts I closed or the issuer closed through inactivity.
Matter of point, I just closed 5 CC accounts (out of 23) because I wasn't using them anymore and my FICO score went up after that.
What really counts is your credit utilization, not who closed the cards as long as all payments are historically on time.
I respect your personal experience. I agree that what counts is the
credit utilization. When you close 5 accounts, definitely you reduce your total credit and everything being equal, your utilization goes up. So I do not know how you get a FICO score bump with the account closing.
The other important factors are payment history and number of accounts that have balance. I sometimes have 15 CCs that have balance (reward spending etc). I do see the complaints from CBs.
From my own experience, closing a CC with a low credit line has no or little impact to FICO score. But if I close a CC with $35,000 CL, it should result in a rise in credit utilization and drop your FICO.
What we normally recommend is that, if the CC carries AF and it does not fit your needs, then try to downgrade to no AF CC. If not possible, then just close it. Do not worry about credit score. Your AF cost is more than the few point impact (if any) on your credit. For the CCs without any AF, there is no need to close them. If you do want to close some, then do it slow. It is better to keep total credit line stable and the utilization stable.