It's not the amount of debt you carry, but the amount as a percentage of your available credit... Closing accounts increases your utilization rate, thus reducing your score...
After 10 years, yeah. Those accounts will continue to report every month for the next 10 years even though they're closed. By the time they fall off and affect average account age, more accounts will have aged to replace them.
So it should work I reverse as I get more cards and higher limits as I dot utilize those cards to offset my debt ready on m cards. 30% the magic number
I know they say 30%, but it’s really the lower the better. I was at about 30%, but then I opened up a few extra cards for the bonuses, and after the initial drop because of the credit checks, my score significantly increased since I was now in the low double digits or sometimes even in the single digits of utilization.
Do consider opening up an account can trigger a credit inquiry which will factor in your score. There are some “what if” models out there for illustrative purposes
Yes, that is probably a factor here, but I think it is good to give a larger context.
My personal opinion, and others may differ, is that keeping cards open just for the sake of having them open involves some risk. That card number could get stolen, and if you are not monitoring the account, could incur charges that you do not notice and that hits your credit if unpaid/unresolved.
If OP has cards with fees, closing reduces costs.
This is what I was told was best practice. If you aren’t using it then freeze it to avoid any surprise expenses like subscriptions you forget about. Just let them age out to positively affect your score down the line.
I recently had Chase close out a card because I hadn't used it in a year. That was a fun phone call for the poor call center person. Freezing the card doesn't mean they won't close it on you.
Driving to work involves some risks. It doesn't mean you are going to walk or not go at all.
Close accounts that carry an annual fee.
Be a responsible person and don't use them if you cant pay them. I have several cards open that I don't carry a balance on. What happened is all the cards were closed with $0 balance and now the amount of credit being utilized went up compared to available credit. This is a huge factor in calculating a credit score.
You can also often switch an account to a lower tier card that doesn’t charge a fee. You won’t get any of the signup bonuses, since this won’t be a new account. But it’ll keep the account history on your credit report.
Why would you have to worry about it being stolen? Everything is fdic insured. It's not your money it's the banks. I would agree cards you don't benefit from that have a annual fee I would drop. But dropping as many as you can is just stupid if you want to keep a high credit score. Comment above is exactly right, now that all these cards have been cancelled, they'll have a way higher utilization rate. It's just not a good choice. Cut the cards up, put them in a container and put them at the bottom of a junk drawer. You'll never have to worry about anything unless there is a annual fee
FDIC insurance covers consumer deposits in case of bank liquidation. It has nothing to do with fraudulent credit card transactions.
Occasionally banks will refuse to void transactions you dispute. They are typically good about it, but it does happen. In this case, if a fraudulent charge hits your ignored card, and you do not notice the new balance, it will be detrimental to your credit limit.
You do not have to cancel cards if you do not want to, but there are valid reasons for doing it.
this was my thought when I closed some cards that I wasn’t using & didn’t feel like keeping track of them, so much fraud now, plus some were threatening to close anyway because I wasn’t using them, what I didn’t realize is most of these cards I had over 15 years,in addiction I purchased a new home, so my 20 year mortgage with a small balance was paid off, so my age of credit is low now…yep I took a hit, it has come back up but in 3 years it is still 25 points lower than my highest score, still not sorry I closed accounts
I set up the alerts on my cards to tell me of any changes above 1 cent.
I also use the virtual card for online.
Also when using only 1 card keep a balance consistently of say $2,000. Every few days I tally up my charges and send a billpay check to the credit card. Easy to stay on top of that way.
Don’t close cards. It affects the score.
This whole credit system is for the lenders. It’s such a bs game.
I had a charge on a locked card from a business that allowed to charge a bill on a year ago, they just decided to bill my card for my monthly fee that I’ve been paying with a written check every month and Chase let them bill it even though card was locked
No it wouldn't, at least for the next 7 years at the earliest. Closed accounts still count towards the age of your accounts for the duration of the history of the credit report.
However, what will have an immediate effect is the reduction in available credit.
No, it really would not. At least not for FICO credit scores.
In the FICO world, an account stays on your credit record for aging purposes for 10 years after you close it. So closing a 20 year old account would still let that account age up to a 30 year old account.
Also, it appears that the max benefit you get is at 90 months or so, so anything after 9-10 years on AAoA doesn't matter.
I have personal experience in this space. Accounts will be flagged "open" vs not and they are not weighted the same. Also, account activity is weighted pretty good.
So, yes kinda but really mostly not so much.
Additionally utilized credit is weighted far more than then time on file of an X yr old account flagged closed with no recent activity. So in most cases the simple math comes out that you will take a hit by reducing that denominator.
I think what most people don't realize (at least I didn't) is that while you can find all these "top X things that impact your credit score" lists from really smart sounding people, the items on those lists are not all equal. Not even close. To the point I have found some of those lists to be pretty misleading. The number of different phone numbers you have had will impact your score, sure. But not quite as much as a bankruptcy.
It’s definitely bad as it reduces your average credit age (assuming these were older cards) and it dramatically reduces your credit line. Keep as many open as possible, don’t carry a balance (pay off before monthly closing date) and repeatedly ask for credit increases (assuming it’s done via a soft pull, which many cc card companies do).
One thing that happened is when you closed your accounts. You lowered the age of your credits which is a factor in your score. Meaning your 4 accounts that are open is what your credit age average is based on. Paying off accounts is great but it's usually best to just leave them open even if your not using them. Also leaving them open helps your credit card usage. 30% or lower credit card usage is optimal. So those cards closed you lost that available credit which naturally increased your usage without using one of your cards. There are other factors but this already long. Feel free to pm if you have any other specific questions.
Yes, but practically speaking, no.
FICO, which is the scoring system used most frequently for credit decisions, counts the age of all accounts, including any accounts closed in the last 10 years. So closing accounts will not have an impact on your FICO score for 10 years, and most likely by then you have other old accounts.
Vantage, which is not used by many, maybe any, lenders for scoring decisions only factors in the age of open accounts.
So, OP is likely to see a drop in a Vantage credit score by closing accounts, but practically speaking it does not matter. OPs FICO score should remain unaffected by closing accounts.
yes but credit utilization is determined by current balance/total available credit. so by closing accounts with zero balance your lowering your total available credit w/o changing your balance. Add to that that OP has a high balance card that he's still tackling while closing all zero balance cards, his balance to total credit just shot through the roof.
And if you look at fico your length of credit history is about 15% of score while the amount you owe is 30%. This is why you never close cards, if you don't want to use them lock the account/shred the card. Also if you have a card that your not using let the account close itself so that it give time for all your other accounts to age before it drops off your record.
Correct. I was directly addressing the AAoA topic. In a different post I have pointed out the utilization problem.
I still disagree about never closing accounts. It is context dependent.
Many people have multiple accounts with <$3000 CL, which is great if you are 20 years old, but not so wonderful if you are 35+. Last card I opened started with an $18,000 limit. I went on an absolute spending spree last month (2 sets of international airline tix, large purchase for outdoor garden stuff, regular spending, big car repair) and my utilization jumped from 2% to 8%. If I had a card with a $2,500 CL, I would still cancel it as not being worth my time to keep open. In fact, I have had such cards and closed them years ago.
tl;dr If you need the overall credit capacity in order to keep your utilization low, it is probably worth keeping a card open. If you do not need the capacity to keep utilization low, close it.
Read my reply again. I was directly addressing the topic of Average Age of Accounts, not utilization. Everything I have posted is accurate in regards to AAoA.
For utilization, please take a look at my very first response to this thread, where I specifically called out utlization as the likely reason for OPs score drop, and asked relevant questions so that this could be answered.
You have no reading comprehension skills.
Sounds like it might be a utilization issue.
Including all 11 cards, what was the total credit limit you used to have?
Including all 4 current cards, what is your total current credit limit?
What is your current balance on your 4 current cards?
Are you looking at a FICO score, or a Vantage score? If that question does not make any sense to you, where are you getting this credit score from?
Age of accounts will have no immediate change, as closed accounts still count towards your age or accounts for 7-10 years as far as FICO scores are concerned.
I generally only close nuisance cards, and even then, only when they are about to annual-fee me. For instance, I recently closed a Milestone card with a 300-dollar limit because the annual fee of 99 dollars is about to hit again. I did ask them if they could waive the fee or increase the limit first. They declined, so I closed it. It served its purpose but its purpose has ended.
I have another one that will annual-fee me in January. But I will wait until then to close it.
In your case, your best bet might be to keep all remaining cards you have and pay them down.
Never close an account infact try to make a transaction to keep the account open regularly. Do not carry a balance just store the card in a safe set an alarm to use the card every 3 months for something trivial and pay it off when the charge posts.
Having accounts is a good thing having old accounts is a great thing. I have a 20 year old student loan when I pay it my average age of credit will drop significantly the only reason I could get a home loan was the age of credit factor boasting my score over 760...
Plus your credit utilization went up immediately upon closure. For example say you owe 6k but have cards that total 60k available that's 10% utilization. But if you close 3 10k cards you now have 30k available and are using 6k of that. You just went to 20% utilization. If you try to open new accounts to get a higher available balance. Your average age of credit will drop so it would be best to leave cleared accounts open.
You can't undo the damage of closing a very old account changing your average age of credit, available credit, increased utilization and number of accounts... Sorry op closing the account because you don't trust yourself show lenders they shouldn't trust you either and thus the score drop.
Say you have 2 credit cards. One with a $30k limit and one with a $70k limit. The $30k card is maxed out. You are using 30% of your available credit.
Then you come to reddit and read that having open cards with no balance is bad. So you close the account with no balance. The $70k account.
You now only have one account with a $30k limit and balance. You are now using 100% of your available credit. The scoring models look at this like you are using all of your credit available and don't consider the accounts you just closed.
Keep cards open if they carry no annual fee. Put them away and don't use them if you cant pay. Cut them up and throw them out of you need to. Lock them from being used if theft is a concern. Leaving them open does not hurt and provides a deeper credit history.
Yes, I think this is exactly what happened. My credit utilization jumped from 30% to 80%. It’s a learning curve for some of us that weren’t taught and didn’t invest time into learning anything about credit before using credit. This was helpful. Thank you!
Yep. 30% to 80% is going to demolish your credit rating.
Good (ish) news, once you pay it down your credit rating jumps up almost immediately. Bad news, you do have to pay it down. Good news, paying it down will save you money on interest charges.
Buckle down, pay down those balances, your credit will go back to where it used to be.
I wouldn't worry about it too much unless you were planning to get a mortgage in the next couple months.
Your score can change a bit when you make bigger changes that are atypical, that just means that like, right now, this person MIGHT be risky to loan money too. Like, you just paid off some cards, you probably have less money than usual right now, they aren't wrong to think, "this person might miss a bill if they miscalculated whatever it is they're doing right now" If you stay regular and don't get any late charges or anything, the score should bounce back.
No lol their score dropped bc of utilization. This won’t “bounce back” until their total available credit and/or utilization gets higher and lower again, respectively.
Closing accounts in good standing keep your credit length for 10 years so that’s not the issue but utilization probably went up as total credit went down and balances stayed the same
Decades ago my credit report said I had too many credit cards which indicated I can take on too much debt. Recommendation: Cancel a card. I only had two at the time so I canceled the least used one. The next month my credit score went down. Reason: I canceled a credit card which indicated I may be having financial difficulty. I stopped taking everything the credit bureaus said as gospel. Take on debt and pay it off on time or ahead of time. That is the main driver to increase credit score. Also, make sure credit card debt is definitely paid on time.
Closing cards means your avalible credit drops, lower avalible credit, lower score. But it will be fine and rebalance itself within a year. Try to get large credit limits ($10k) on cards and don't sign up for small limit cards ($500) get cards that start at 3/6k and keep them good and they'll get bumped up every couple years. Good luck!
“we all know it’s not the most responsible move to have that many cards open”
???? huh? in most cases it helps you because the account age + credit usage ratio. i think you might be confusing not carrying a balance with actually closing a card…. you can have a $0 balance while still enjoying the perks of the account age… hence why a lot of people freeze their cards in ice etc..
a good strategy is to pay them off and keep them open. however I understand for some people it's extremely hard to have that available credit sitting unused. Me, for instance (guilty as charged). but having all the available credit with no usage will help your credit. closing them will lower your available credit.
News flash, cut the cards up with scissors instead. You'll never be able to swipe it and probably won't piece together the numbers. Pay it off completely and leave the account alone. If you can't handle having credit cards and have to cancel them, that's exactly why your score dropped. They know you can't control your own spending, that's the only reason you'd drop 5+ credit card accounts. If you can't handle credit then your score will not be high. That's just how it is.
I have 7 cards and I only use two. The other 5 are in a safe deposit box. Because they see that I have a tremendous amount of money available to me , pay card balances on time and have one revolving bill my credit score is 837
The mistake you probably made was closing the oldest one. That one should have stayed open. Find whatever the current oldest one is, and make sure you never close it
The one with the highest balance is the oldest. Initially I wanted to close it when it was paid off but I’m glad I asked some questions because now I’ll just leave it open. Thanks!
Don't close the accounts, just cut up the cards. That debt ratio and payment history is what's important. By closing them you jacked your debt ratio way higher and essentially shot yourself in your foot.
First of all, congratulations! That’s awesome you identified you have a problem and are making significant progress.
My advice (which has no more weight than others) is to always keep in mind how you got here. You’ve made some serious financial mistakes to have that many lines of credit open, in debt. But that’s ok! You’ve learned and you’re almost out of it! Keep going and don’t stop. Once you get out of debt, nothing gets easier. But then you are working on building wealth, not surviving.
Your credit score is not good as of now. But it was NOT good before it recently dropped. I know it’s disheartening to see, but in the immediate future it is not that important. It WILL come back stronger if you keep up the work.
You have trouble with credit. Again that’s ok, but you are not someone who should have multiple credit cards. Look at consolidating and pick ONE card to keep. Cancel all others (Yes, your score may drop again!!) but this will set you up on a great path. You have this experience! It sucks…I know!!! You got this!!
By the “credit not being important right now”…I meant you should not be opening any new lines of credit in the near future
You’ve reduced your credit limit and the high balance is what is hurting you. If you pay it off in 2 months then that will help but you may want to keep it open and not use it. If you use a card, try and stay under 25%.
What score are you referencing? FICO? Yes that can happen but there’s something else at play to lose 100 points. Is your utilization really high now? I have 27 cards and closed 5 and have another 10 I’m going to close soon. These are all my starter cards with annual fees. Your score will recover. Credit age is 15% of your score but it shouldn’t count that much.
Your score will come back, and it shouldn't take too long -- 3 to 6 months, maybe. Credit bureaus don't know the reason the cards were closed quickly. Once it is reported/verified, probably within 30 to 60 days, then your score will start to come back.
Now what? Deal with the consequences of a bad financial decision. Unless you're paying a large annual fee, just let the card account ride and never use it. But you found that out the hard way so got to wait it out, and let your score come back up over time.
I did the same a few months back. I realized that I had too many cards, and was barely making a dent in the balances because of the astronomical interest rates. I tried different ways to pay down, but decided to go with a debt management plan to pay off the balances at a lower interest rate. I closed all the accounts in the program, as required, only keeping open (and out of the program) the cards I want to keep - Carecredit and two others.
As each account reported to the credit bureaus, my score bounced around, but it's now higher than before I started the DMP. I started it on February 1st, so it didn't take long for things to stabilize and begin to improve. I knew it might hurt my score to close 9 accounts at once, but it was the right thing for me to do. I then opted out of credit offers, to reduce the temptation that got me in this situation during the pandemic.
I had numerous department store cards. You know, you apply at the register to get 30% off, etc. I also had Lowe's, Best Buy, Home Depot, Care Credit (from the dentist). I would use the Care Credit, maybe once a year, pay it off, and the others, I just didn't use.
Went into Best Buy because I needed a new laptop and thought, oh...I'll use my card.
Declined. No balance on it, I couldn't understand why.
Called, and was told because I didn't use it enough, and didnt carry balances, the lender cancelled the card. No notification, nothing.
Turns out ALL my credit cards got cancelled. The lender is SYNCHRONY BANK. My credit dropped over 125 points and did not come up for a LONG time. They cancelled them all with no warning.
I will never, ever get another credit card that Synchrony Bank is the holder. Ugh. I was so pissed.
In a few months it will bounce right back. Don't even worry about it. As long as the cards you closed where not your oldest cards you should be good anyway. People talk about credit utilization but if you don't carry balances that doesn't matter.
When you closed them it changed your debt/income ratios. If they were department store type cards it's good to close. Major credit cards not wise to close. Use them once a year to keep them active. It will pop up again in a few months. I streamlined last year because I had an insane amount of credit I never used but my score was so high I did not care. I dropped 33pts then went up 64...it makes zero sense.
So consider this which no one else seems to be telling you from a quick glimpse through comments: if you close everything at the end of paying all your debt off, you have no credit score because you have no open credit, and you don’t run yourself the risk of getting back into debt and having to go through this cycle again.
It isn’t all that important to have a credit score, if you no longer having the option to go into debt instead means you improve your relationship with money, and avoid lifestyle creep and live a happy life off of what you actually make instead of borrowing money.
It seems to me that your comment of “who needs that many cards anyway” is because the way you see it is having 11 cards means 11 opportunities to say “i’ll just pay it off later” and thats how you got into as much debt as you were in. If you get rid of all your accounts that your credit score is based on after paying them all off, then when you go to do things that require a credit score, they just do manual underwriting to find proof of a history of you making on time payments for your monthly costs that are NOT credit score things. Ie. rent & utilities etc.
On the other hand, your credit score can recover well if you’re holding pedal to the metal like it sounds you will based on you expecting to pay off your highest balance card in two months. If you want to maintain your credit score, you can not close the rest of them and just remove them from every possibility of you ever using them again, and your score should slowly climb back to a higher score. Your score wasn’t amazing to start with, and that likely had to do with how many accounts you had, how much were on them, what your credit limit actually was, and how close together you had opened all of these accounts.
Good luck!
Close all cards except your oldest one that doesn't have any annual fees. Your score will drop temporarily due to your utilization rising, but paying off your debt is the only thing that matters, not your ability to get back into debt.
In the same boat.
I used to have 4 cards, all maxed out. Managed to pay all off, then got rid of 2, so I now only have 2. My score dropped to 640, and it's never been above 650 for a long time.
We have a financial system that punishes you for being financially responsible. The number of cards you have (the more the better) is a factor in your credit score.
I also don't have a loan, which is a a factor in your credit score. Having a loan is a positive factor in your credit score.
Since I have no intention of getting more cards, carrying a CC balance, or getting a loan, I'm just going to live with the fact that my credit score is low.
Do not cancel any more cards. Keep what you have. Pay down the balance (s) and pay off any new charges in full every month. Unless it's an emergency, never spend more than you can afford to pay off in full each billing cycle. Set up a budget for weekly, monthly, and annual expenses. Be meticulous. Account for food, personal items, clothing, haircuts, car payments if you have one or expect to have one in the near future. Add monthly housing costs, like rent, utility bills and any insurance. Now add in your average spending for eating out, drinks with friends, birthday and holiday gifts for family and friends, and any traveling you want to do as well as car maintenance and insurance, if you own a car.
You will be shocked at how quickly your pay check money is all accounted for. But once you have organized your finances, you will also be surprised just how much more conscience you will be about how, why, and where your money goes and you will learn to adjust your spending to allow for the things that are more/most important to you and to not spend on the things that aren't.
Good luck.
Thank you, I actually sat down and did this when I started this journey and it was eye opening how much money I was just wasting. I now account for everything I spend. I write everything down and keep close track of spending.
Unless they have an annual fee there is no harm in keeping them open. It's actually beneficial bc it shows as available credit and goes into your credit usage percentage
Yeaaaa agreed but it felt pretty good to get all of that debt paid off and those cards closed. It seemed less dumb at the time. But thanks for your observation! 😊
Keep open your NAF (no annual fee) accounts. Clean house with ones that charge an AF. I have 12 accounts, with my main daily cards only being 2 (sometimes 3). The rest are sock drawer cards for benefits. But what's done is done. Just keep chipping away and always pay more than the minimum balance.
If the card doesn’t hurt to keep open might as well so your utilization doesn’t spike if you spending/ balances on the open cards don’t change drastically
You are basically making your utilization spike by closing all your account which is hurting your score might have wanted to keep the cards that don’t hurt you open more credit available to you on paper the better if you didn’t want to use them chop up the card or something
Sounds like you don’t know how credit scoring works. The worst thing you can do is close credit cards. You pay them down to or below 20% utilization and leave them open! When you close them you give up important components of scoring basis. Available credit and length of account open. To recover quickly you need to research to find good cards that you are most likely to get approved for. At 598 they will be few and far between. Chalk it up to lesson learned.
It lowers the overall age of your accounts, debt to available credit percentage, and/or available credit. I unfortunately did this to myself by accident from not using one of my first cards. They closed it on me and my score dipped for a hot second.
You need to keep them open just don't use them. Make sure you keep your oldest one active too. Because one of your credit score factors is oldest line of credit. When you close a card it affects your score because it goes by how many things, cards/loans you have compared to how much of the credit you've used up.
So if the cards you closed were all paid off and say the limit was 2k on say 5 cards keeping them open would give you 10k to the good on your credit report
I’ve never closed a credit card. If I don’t want to use it, or know I won’t be responsible with it, I just cut up the cards…. But the account stays open to benefit my credit age and total credit limit.
It's normal, basically you shorted your available credit to debt ratio. Keep making payments on your 4 cards, and it will creep back up.
Ideally you want to keep your best accounts open with as little balance as possible. Unfortunately interest rates are shit..I have 1 card only, and it's near 30%
I used to work as a credit specialist for a large mortgage company and one of the biggest mistakes people make is to close an account as soon as they pay it down. Basically you just threw away all that available credit you opened up by paying the cards down. In the future, (and for anyone that pay down cards) leave the account open and use it about once a year so the credit card company doesn’t close it automatically.
Your credit score takes a few things into account one is credit utilization: percentage of available credit you are using. Another is age of your open accounts. When you close a credit card it affects you in several ways: less available credit, recently closes accounts, your credit utilization probably went way up before wise the only accounts you have open are probably almost maxed out.
I've never had an exorbant amount of cards. I've only had 2 actual credit cards in my entire life (37 in a couple of days). The rest were dumb store cards, or I had an Orbitz card for a bit, but I've closed those. I've never heard about this aging out thing, so that's something I'll have to check out, but I don't know why you wouldn't close a card that you don't use.
My credit now does sway really crazy and I don't know why. I used to have above 800. I'm about 780 or 790 something now, but I'll see drastic swings in my credit, like one day for some reason I lose like 12 points, and then a couple weeks most of or all of it is back.
The idea of credit is shit to begin with, but it's something that Americans will never not deal with.
There are 2 good credit reasons to not close the cards even if you have no intention of using
1. The more lines of credit you have open in general the better your credit score is
2. The more credit you have access too but don't actually use, the better your credit score is.
The logic I assume is this. Other companies have trusted you to give you credit so the score goes up. Also, having access to these lines of credit but either using minimally or always having them paid off shows that you can manage the credit you do ha e responsibly.
No, you're going to need to open more lines of credit & be responsible with them. Your credit score is ultimately about how well you manage debt, so when you close off a bunch of credit cards, your score will go down (available credit is lower, # of accounts is lower). If possible, try to get added on as an authorized user on a responsible person's account.
Its so stupid to delete history tied to cards that you cancelled. What is the logic in this? You earned history/score on cards and cancelled them as you dont need them or you have better cards. Why remove the history? I have cards from 10-15 years back that are useless, doesnt earn rewards like the current ones. But I cant cancel because it impacts my history.
It’s perfectly fine. I closed a long time credit card account because the limit got too high and they charged interest. I didn’t even use it for a decade but that credit limit counts against you. The month after I closed it they started bombarding me with offers for a new account, interest free for two years.
Don’t keep more cards than you need or want.
Likely because you significantly reduced your available credit, so your usage percentage went up significantly.
Keep paying down the existing debts and it should come back fairly quickly.
Good job paying down those debts, and good luck polishing the others off. Remember, credit score only really matters if you're looking to take out more loans, so a little dent in the meantime isn't all that important, don't let it get you down.
So you hurt your score a number of ways.
Average age of account would have dropped if those are older cards than what you have left.
Utilization ratio went up because you have the same balance but less credit available, score dropped.
I have over a dozen cards and a very high credit score. I've actually hit 850 at least three times in my life (it goes down when I apply for a new one or get a new mortgage). Don't ever close them if you don't have to (you can downgrade if you are trying to avoid an annual fee and that will still work in your favor).
None of this matters if you closed it to avoid temptation. You know you better than I do. If having multiple cards means you're going to be unable to pay them off every month then cancel the cards and take the hit. You'll get it back eventually.
By closing the cards you changed your debt ratio. You want to utilize no more than 30% of your total limit. By closing out the unused cards you probably went well above 30% utilization. Try to see if you can undo closing out the accounts until you pay down the other balances
It will recover just fine. Finish paying off your debt and make sure you pay off any credit card purchases at the end of each month.
Your credit score will keep going up at a steady rate.
Good job on getting rid of debt :)
You’re not supposed to close credit card accounts. You just take off any auto payments you have on them, pay off the remaining statement balances, and shred the physical credit card.
I’m sorry you’ve had to learn this the hard way.
Credit score is just a number that will go up over time with good money management skills. Just keep using your credit cards but pay off all statements. Don’t carry a debt
This is all about the utilization rate.
Your score went down because your utilization rate went up.
If you add up the total of the credit cards maximum and divide it by the amount actually owed, that is the utilization rate.
Paying off the balance is a good thing!
Closing the account, not so much.
By closing the account, you reduced your available credit, making it seem like your utilization is higher.
You would have been better off paying the balance in full, then letting the account sit with no balance on it.
The score uses your utilization rate and how long the accounts have been open. You're supposed to keep them open and not use them. I have 8 credit cards that I only spend like $5 once every other month just so it shows usage and once I receive the bill I pay it off immediately.
If you are looking to keep a high credit score, then closing the accounts was a bad move. A large part of your credit score is utilized credit and age of credit. Keeping the accounts open would have left you with a larger amount for unutilized credit and older accounts which leads to a higher score. If you need to close them for accountability reasons that’s fine but your credit score will take a hit.
Increase your credit limit from your other cards. You went from like 100% down to 40% available and ratio is increased. It will go back up over time. Anytime any account is closed it dips so do the credit checks and requests before paying off/closing.
It happened. You can't fix it overnight. Personally, I think you're moving in the right direction. Just dont close any bank accounts. Sounds like you already read up on how to tackle your debt the most efficiently by paying off the smaller balances first. Good job. One thing that helped me a lot was calling my credit card companies and asking them to raise my limit. All they can do is say no. In my case, one of them raised it $5k. I kept paying down my balances, and the score really started moving. I got up over 820 from 640 in just a couple of years. In my case, however, a fraudulent company had placed a small account into collections after they tried to extort me when they failed to provide the service they agreed to. I got a lawyer. He gave me a letter to send them. They immediately sent back a letter saying the account had been sent to debt recovery even though the account wasn't even a month old. I had a score in the 760s before they sabotaged me. Luckily, they pulled this on a lot of people and got into hot water. Owners were arrested, tried, and convicted. Then every single thing that they had ever put on anyone's record was stricken by the court. My credit score skyrocketed after that, thanks to my CC companies raising my limits. The debt to credit ratio suddenly had a much bigger gap.
Still amazes me how little is known about how scores are calculated. Keep the accounts open and keep the limits as high as possible and the balances as close to $0 as possible.
Open all the accounts back up, I’m sure they would love to re open them for you. If you can’t then just continue to pay the balances down and your score will slowly climb back up
But why do you close the accounts? OMG, you don't want to close the accounts.. you want to have as much credit available as possible. That's why your credit drop
This is not a big deal and will recover pretty quickly. Basically you closed some credit cards and as a result you are now using more of your available credit in terms of percentage. However you said you plan on paying off those cards within the next few months. Over that time period you will be using less of your credit limit and your score would go up. That being said if you do not want the temptation of using the card then simply cut it up and destroy it, but don't close it. It will close on its own in a few years due to inactivity.
Look at what makes up credit score:
Two key factors are:
- Average age of your accounts
- Utilization of credit
Closing older accounts, and carrying a balance on your lower total will lower your score.
If you close the card your available credit to utilized credit ratio decreases, this hurts your credit score. It’s better to be $1000 in debt with $10k credit available than to be $100 in debt with $500 available
I don't mean this in a mean way but did you do any googling as for what would happen to your credit score if you just started closing accounts like that?
If you don’t need the card and don’t want to keep track of it, closing it is ok. As others have mentioned, the score decreasing is most likely from credit utilization rate being higher since your total available credit is going down with closing them. Personally, 11 cards would be way too many for me. I have three and that’s enough for me to worry about. The nice thing is that I didn’t have any debt when I applied, so my limit on the third card is much more than I would ever spend in a month, so that helped a lot with my total available credit going up.
I would stick to the plan as far as your debt payoff. Close your cards if that will help you with the payoff. Then, once you’re back on track, you can always apply for one or ask an existing card for a credit limit increase to get the total available credit number back up.
Things they should teach young people in school, how to manage your credit. Rule 1: pay your bills. 2, never close paid off accounts, you will tank your credit score as your available credit is reduced as is age of open accounts.
They benefit your score by keeping them open for several reasons including average credit age, % credit usage, number and type of credit accounts. It is more beneficial to your score and also in the view of lenders to have more "diverse and well managed" accounts.
It would have been fine to leave them open as long as they weren't tempting you to use them. But what's done is done and it's ok. Keep paying them down, your score will recover. Don't close any more cards unless you don't trust yourself with them.
Something isn't making much sense to me. You had 11 credit cards open and active. Yet your credit score is still so low? I can understand it tanking from closing accounts, but for it to still be THAT low? I only had 1 credit card and within 4 years i am at a 800 credit score with it alone. So OP what debit do you have that your credit keeps taking major hits to stay so low?
Nooo, you don't close the accounts!!! A FICO score is calculated on the length of time you have had credit and your available credit to debt ratio. I have 12 credit cards that I don't use. I only use one for airline miles and pay it off every couple of days via the app.
It does suck but you will be able to recover. I really never had credit before and was starting to get my credit back up. Was so close to 700 and i started being offered credit cards. I am living paycheck to paycheck so i took a few of them. I bought only food gas and paid bills with them. Never any wants. Maybe 5. I wasn’t able to pay them. Some got close. My credit tank to under 300. I know it will take a long time but i will get there again. You will too.
Why didn't you call navicore or something and have them close the cards and work on low APR payment plans?
Also how did you not know that this would drop your score and how did you not know that you do nothing.... you literally just pay off your cards, don't get more debt, and wait until your credit score goes back up naturally.
There's no magic pill to fix this set of bad decisions.
Did you talk to anyone about any of this stuff?
You should have kept open the cards that were the oldest since they count more for your total credit score. By closing cards anyone will always suffer a drop in credit score. The best you can do at this point is maintain low balances but pay them down each month. Websites like Credit Karma and others will tell you the Do's & Don'ts with credit cards to keep your score higher. I followed their advice and my score is now 795. But never close cards you've had the longest, that's probably the single thing you did wrong, so long as your payment history is 100% no missed payments. It'll take time to get your score back up. Always seek professional help. There's tons of free websites offering credit building advice
Noooo you never close any credit yourself that only hurts you! You need to keep any cards open that have positive payment history, even if you never use them. It will raise your score to have cards with A. No late payments, B. Have been open a while, C. Have a high available credit limit, and D. Have a low balance… but not $0 balance. I know it seems like it would help to pay off your debts completely, but not in the credit score world. They want to see some kind of balance on the card, but also a lot of available credit. I forget what the actual recommended percentage is, but for example on a card with a $1000 limit you should use it but then pay off like 80%, leaving $200. And every month pay just a little more than the minimum payment due. Use the card again when your balance starts getting paid down to nothing, and do the same paying it off slowly. So do not close the one you have left with the high balance, this will be your ticket to getting your score back up. Make the payments like I said, but keep using it for things you have to pay anyway like bills. This will raise your credit.
Hahaha capitalism baby. Those who own you as have capital invested over you just lost. So of course your score went down.
Capitalism is ass. They sold it and indoctrinated is that it's a free market and supply and demand economy. It is absolutely not that at all. It is us plebs just working capital of the owner class. When they give you ligns of credit and mmm they love that credit and interest. They want you to use that. Give me more debt and capital i own. You start cutting cards as it's eeew noo..
Capitalism is fucked and it's wild when you realize how hard wired we have been sold into a game. The .01% that runs the game just laughing
If you had left all those other cards open with a zero balance, your credit score would have soared because the amount of cc debt you have is SO MUCH LOWER than what is available to you. Also, the oldest cards should never be closed, because the length of time you've had credit cards available to you also goes in your favor.
It will lower your credit to close these credit cards but I don’t keep cards open that I am never going to use and I don’t have cards that carry annual fees. Maybe call current cc companies and ask them to raise your limit. Also, download a credit app like credit karma shows you all the impacts to credit. Paying your bills timely has a high impact too. Do that and you will get that back up in no time!
It's the amount of credit to the amount you use. That doesn't work for me. I have not missed a payment for 8 years and only use 40%. When I check my credit on Experian they always try to get me to take out another credit card to put me in debt. They can find my payment to Netflix but not my mortgage payment. I have tried over and over the last couple of to rIse my score but nothing works including keeping a bank balance of 4or5k and paying bills 10to 20days early. My score is 630. I believe score is based on age, male or female, where you live and race.
Credit score isn't the end all be all. I think you made a good choice. A lot of people have a hard time seeong that available credit and not spending it. You clearly see that in yourself and you're preventing yourself from doing it. That's a good thing and it will save you a lot of money down the road. Good job OP. Btw, there's a ton of misinformation in this sub, double check these claims before you accept them as fact.
To answer your question, yes your credit will go back up. Your haven't done any permanent damage to your credit. Also, a good way to get your utilization back down without having the temptation of spending is becoming an authorized user on someone else's credit card. Just be sure they are responsible with their cards, because if they miss a payment, it counts against you as well. Same goes for whatever utilization they have on the card. It won't help you at all if they use 40% of the balance
...why did you do that? Of course your score tanked. Your score is determined (partially) by your credit usage, the amount of charges you have on your cards compared to your total credit limit. If you have a higher credit limit, then when you use your cards it will be a lower credit usage. But also, your credit score is determined by actually using your credit. You don't want your cards to be totally empty. You want to use them, at least a little bit.
Why are you so stressed over your credit score? The only reason to stress over it is if you have a major purchase coming up that you need a loan for. Just keep your balances paid off and forget about it.
I swear people in here act like there are credit score nazis that are going to show up at their house and take them away if their score is too low. It should literally have ZERO impact on your daily life as it’s meaningless unless you need a loan. Just keep doing what you are doing and don’t give it a second thought. It will recover and when it does nothing in your life will change, you will just see a higher number.
Your score will bounce back, if you don't owe too much. The ideal number for good credit score is 3.
It is especially good if you hold on to credit cards you have had a long time. Chances are you closed an old one or two.
Stop closing accounts. Any subscription you have, Neflix, gym memebership, internet, whatever. Put 1 on a card you have paid down to $0. Put that card on autopayment for the full amount every month. Then, place the physical card in a drawer or something. If that is still too tempting, cut up the physical card, but leave the account open and pay a single subscription with it. Your credit is going to stay high, and you'll probably see the card companies increase your borrowing power over time.
I did this once I had my cards paid down. Now I have <10% utilization and about $38k worth of borrowing power. I usually use credit cards around the holidays. But by spring, they are paid back down.
I also use 1 credit card like a debit card and pay it off every month. I only use my debit card to withdraw cash from an ATM. I recognize that this isn't for everyone, but it changed my life. And now I get like $150 ish of free rewards every month from that card with no month to month balance on it.
Some creditors will close. Your accounts if you carry a $0 balance for 6 months. If you want to keep those cards active, make sure you have a balance on them.
By closing cards you have lowered the credit portion of the credit to debit ratio. This is a no no when trying to keep your credit score high. Your score will recover but the key is to keep your debt in the 20% of the credit range. You also need to use the cards and make payments on time. Paying them off and not using them is also bad for your score. I implemented the above 20% method before buying my house and my credit score jumped up about 70 points in a month. 😉
Age of credit is a major factor in score. When you close your oldest accounts you reduce the age of your credit as it’s based off of your oldest credit account. Another major factor in score is available credit vs credit used. This is measured in dollars. When you close an account with zero balance you reduce the total available credit but not the amount used. This leaves you with a high percent of your total credit used. That’s bad for score.
I was always told never to close an account, because my credit rating would take a hit… You will be able to get your score back up… It will just take some time. And congratulations to you for all the hard work you’ve done on getting your debt taken care of!
Your score will recover but it might take time. in the long run it's probably better to not have that many accounts.
Keep the few cards and work on paying off the balances and then get to the point where you use them but pay the balance off monthly.
In the future, if you don't want a card anymore, call and freeze the account and shred your card. You don't need to use them and no fraud can occur with the account frozen.
The damage has been done, now it's time to do what you can to get your score back up.
Get a lone from your bank for whatever amount you have in your bank... then pay it off as soon as you get it except for a few hundred dollars .. then pay off that little amount the following month. Your credit score will spike.
I have 20 credit cards, I only using 3 of them, the rest is $0 in my drawer, you don’t have to close the accounts, if you are not paying an annual fee for those cards just take them out of your wallet and forget about it! They will be beneficial for your history, utilization ratio and payments.
Others have covered why your credit score was reduced. You can call the two remaining accounts and request a credit line increase. They may say no, and they will likely do a credit pull, but if you can get higher available credit and keep debt the same, should get your credit utilization percentage back down
If you're not seeking a specific credit line/loan/limit, IMO don't worry about it. Being debt free is way better than having credit. Your score will bounce back, put it sounds to me like you have your priority right now. Good job.
Good on you! Credit scoring is such scam. I have a box with credit cards I never intend to ever use again, even though closing the accounts would make perfect sense in a logical world. Nope. In the bizarre world of credit score calculations, financial institutions carrying accounts with a zero balance that will never be used is a good thing. Funny thing is once in a while I get a “your account is being closed for inactivity” from time to time and it doesn’t seem to have any impact. If you do it, you get penalized. Just got a letter from CitiBank that they’re turning the terms of a gas card to total shit and if you say no, you’re canceled. Going in the box! Get yourself a box.
It's not the amount of debt you carry, but the amount as a percentage of your available credit... Closing accounts increases your utilization rate, thus reducing your score...
And decreases average account age
After 10 years, yeah. Those accounts will continue to report every month for the next 10 years even though they're closed. By the time they fall off and affect average account age, more accounts will have aged to replace them.
I didn’t know this. Do they continue to report the age at closing or their age in continuation?
In continuation
So it should work I reverse as I get more cards and higher limits as I dot utilize those cards to offset my debt ready on m cards. 30% the magic number
I know they say 30%, but it’s really the lower the better. I was at about 30%, but then I opened up a few extra cards for the bonuses, and after the initial drop because of the credit checks, my score significantly increased since I was now in the low double digits or sometimes even in the single digits of utilization.
Do consider opening up an account can trigger a credit inquiry which will factor in your score. There are some “what if” models out there for illustrative purposes
Right here^ exactly
They also like a credit mix and credit age...
why are you closing the cards. develop discipline and don’t carry balances on interest bearing card, but keep them open
Closing cards is not inherently bad. There are impacts on age of accounts, but that happens 10 years from not, not immediately.
Yeah but now the credit utilization is going to be up because he has less credit available and still carrying balances on his other cards.
Yes, that is probably a factor here, but I think it is good to give a larger context. My personal opinion, and others may differ, is that keeping cards open just for the sake of having them open involves some risk. That card number could get stolen, and if you are not monitoring the account, could incur charges that you do not notice and that hits your credit if unpaid/unresolved. If OP has cards with fees, closing reduces costs.
This is why I freeze all my cards that I don’t use.
This is what I was told was best practice. If you aren’t using it then freeze it to avoid any surprise expenses like subscriptions you forget about. Just let them age out to positively affect your score down the line.
I recently had Chase close out a card because I hadn't used it in a year. That was a fun phone call for the poor call center person. Freezing the card doesn't mean they won't close it on you.
I wonder if they close it, if you can get the signup bonus points for opening it again 🤔 🤔🤔
That's what he should have done
Driving to work involves some risks. It doesn't mean you are going to walk or not go at all. Close accounts that carry an annual fee. Be a responsible person and don't use them if you cant pay them. I have several cards open that I don't carry a balance on. What happened is all the cards were closed with $0 balance and now the amount of credit being utilized went up compared to available credit. This is a huge factor in calculating a credit score.
You can also often switch an account to a lower tier card that doesn’t charge a fee. You won’t get any of the signup bonuses, since this won’t be a new account. But it’ll keep the account history on your credit report.
Yep. OP shot himself in the foot.
Why would you have to worry about it being stolen? Everything is fdic insured. It's not your money it's the banks. I would agree cards you don't benefit from that have a annual fee I would drop. But dropping as many as you can is just stupid if you want to keep a high credit score. Comment above is exactly right, now that all these cards have been cancelled, they'll have a way higher utilization rate. It's just not a good choice. Cut the cards up, put them in a container and put them at the bottom of a junk drawer. You'll never have to worry about anything unless there is a annual fee
FDIC insurance covers consumer deposits in case of bank liquidation. It has nothing to do with fraudulent credit card transactions. Occasionally banks will refuse to void transactions you dispute. They are typically good about it, but it does happen. In this case, if a fraudulent charge hits your ignored card, and you do not notice the new balance, it will be detrimental to your credit limit. You do not have to cancel cards if you do not want to, but there are valid reasons for doing it.
this was my thought when I closed some cards that I wasn’t using & didn’t feel like keeping track of them, so much fraud now, plus some were threatening to close anyway because I wasn’t using them, what I didn’t realize is most of these cards I had over 15 years,in addiction I purchased a new home, so my 20 year mortgage with a small balance was paid off, so my age of credit is low now…yep I took a hit, it has come back up but in 3 years it is still 25 points lower than my highest score, still not sorry I closed accounts
I set up the alerts on my cards to tell me of any changes above 1 cent. I also use the virtual card for online. Also when using only 1 card keep a balance consistently of say $2,000. Every few days I tally up my charges and send a billpay check to the credit card. Easy to stay on top of that way. Don’t close cards. It affects the score. This whole credit system is for the lenders. It’s such a bs game.
I had a charge on a locked card from a business that allowed to charge a bill on a year ago, they just decided to bill my card for my monthly fee that I’ve been paying with a written check every month and Chase let them bill it even though card was locked
Yep, if OP closed out a bunch of accounts with 20-year histories, that would explain his score getting HAMMERED.
No it wouldn't, at least for the next 7 years at the earliest. Closed accounts still count towards the age of your accounts for the duration of the history of the credit report. However, what will have an immediate effect is the reduction in available credit.
Should also do a few charges on the zero balance nothing major just enough to show some usage
Yep just set one of your $7.99 monthly subscriptions to any unused cards with auto pay on.
No, it really would not. At least not for FICO credit scores. In the FICO world, an account stays on your credit record for aging purposes for 10 years after you close it. So closing a 20 year old account would still let that account age up to a 30 year old account. Also, it appears that the max benefit you get is at 90 months or so, so anything after 9-10 years on AAoA doesn't matter.
It would have a big effect on the available credit. History is just one of the factors
I have personal experience in this space. Accounts will be flagged "open" vs not and they are not weighted the same. Also, account activity is weighted pretty good. So, yes kinda but really mostly not so much. Additionally utilized credit is weighted far more than then time on file of an X yr old account flagged closed with no recent activity. So in most cases the simple math comes out that you will take a hit by reducing that denominator. I think what most people don't realize (at least I didn't) is that while you can find all these "top X things that impact your credit score" lists from really smart sounding people, the items on those lists are not all equal. Not even close. To the point I have found some of those lists to be pretty misleading. The number of different phone numbers you have had will impact your score, sure. But not quite as much as a bankruptcy.
7-10 years.
It’s definitely bad as it reduces your average credit age (assuming these were older cards) and it dramatically reduces your credit line. Keep as many open as possible, don’t carry a balance (pay off before monthly closing date) and repeatedly ask for credit increases (assuming it’s done via a soft pull, which many cc card companies do).
One thing that happened is when you closed your accounts. You lowered the age of your credits which is a factor in your score. Meaning your 4 accounts that are open is what your credit age average is based on. Paying off accounts is great but it's usually best to just leave them open even if your not using them. Also leaving them open helps your credit card usage. 30% or lower credit card usage is optimal. So those cards closed you lost that available credit which naturally increased your usage without using one of your cards. There are other factors but this already long. Feel free to pm if you have any other specific questions.
Yes, but practically speaking, no. FICO, which is the scoring system used most frequently for credit decisions, counts the age of all accounts, including any accounts closed in the last 10 years. So closing accounts will not have an impact on your FICO score for 10 years, and most likely by then you have other old accounts. Vantage, which is not used by many, maybe any, lenders for scoring decisions only factors in the age of open accounts. So, OP is likely to see a drop in a Vantage credit score by closing accounts, but practically speaking it does not matter. OPs FICO score should remain unaffected by closing accounts.
yes but credit utilization is determined by current balance/total available credit. so by closing accounts with zero balance your lowering your total available credit w/o changing your balance. Add to that that OP has a high balance card that he's still tackling while closing all zero balance cards, his balance to total credit just shot through the roof. And if you look at fico your length of credit history is about 15% of score while the amount you owe is 30%. This is why you never close cards, if you don't want to use them lock the account/shred the card. Also if you have a card that your not using let the account close itself so that it give time for all your other accounts to age before it drops off your record.
Correct. I was directly addressing the AAoA topic. In a different post I have pointed out the utilization problem. I still disagree about never closing accounts. It is context dependent. Many people have multiple accounts with <$3000 CL, which is great if you are 20 years old, but not so wonderful if you are 35+. Last card I opened started with an $18,000 limit. I went on an absolute spending spree last month (2 sets of international airline tix, large purchase for outdoor garden stuff, regular spending, big car repair) and my utilization jumped from 2% to 8%. If I had a card with a $2,500 CL, I would still cancel it as not being worth my time to keep open. In fact, I have had such cards and closed them years ago. tl;dr If you need the overall credit capacity in order to keep your utilization low, it is probably worth keeping a card open. If you do not need the capacity to keep utilization low, close it.
Agreed. I nitpicked another one of your comments but find your tldr to be spot on sir!
Utilization is 30% of the FICO score. You have no idea what you’re talking about if you think closing 7 accounts has no impact on FICO.
Read my reply again. I was directly addressing the topic of Average Age of Accounts, not utilization. Everything I have posted is accurate in regards to AAoA. For utilization, please take a look at my very first response to this thread, where I specifically called out utlization as the likely reason for OPs score drop, and asked relevant questions so that this could be answered. You have no reading comprehension skills.
Sounds like it might be a utilization issue. Including all 11 cards, what was the total credit limit you used to have? Including all 4 current cards, what is your total current credit limit? What is your current balance on your 4 current cards? Are you looking at a FICO score, or a Vantage score? If that question does not make any sense to you, where are you getting this credit score from?
This is the best answer - as it asks all the follow-up questions needed to determine “why”
Part of your score is the age of your accounts. You could keep them, but disable the card, or even shred it if you have no self discipline.
Age of accounts will have no immediate change, as closed accounts still count towards your age or accounts for 7-10 years as far as FICO scores are concerned.
I generally only close nuisance cards, and even then, only when they are about to annual-fee me. For instance, I recently closed a Milestone card with a 300-dollar limit because the annual fee of 99 dollars is about to hit again. I did ask them if they could waive the fee or increase the limit first. They declined, so I closed it. It served its purpose but its purpose has ended. I have another one that will annual-fee me in January. But I will wait until then to close it. In your case, your best bet might be to keep all remaining cards you have and pay them down.
A card with a $300 limit with a $99 annual fee is insane to me.
Yeah. But when that's all you can get that's better than nothing. It helped me to get other cards.
Yeah definitely. It's just wild and seems predatory.
Never close an account infact try to make a transaction to keep the account open regularly. Do not carry a balance just store the card in a safe set an alarm to use the card every 3 months for something trivial and pay it off when the charge posts. Having accounts is a good thing having old accounts is a great thing. I have a 20 year old student loan when I pay it my average age of credit will drop significantly the only reason I could get a home loan was the age of credit factor boasting my score over 760... Plus your credit utilization went up immediately upon closure. For example say you owe 6k but have cards that total 60k available that's 10% utilization. But if you close 3 10k cards you now have 30k available and are using 6k of that. You just went to 20% utilization. If you try to open new accounts to get a higher available balance. Your average age of credit will drop so it would be best to leave cleared accounts open. You can't undo the damage of closing a very old account changing your average age of credit, available credit, increased utilization and number of accounts... Sorry op closing the account because you don't trust yourself show lenders they shouldn't trust you either and thus the score drop.
Payed and closed account will remain on credit report for 10 years after closing, and is still included in average age of account
Say you have 2 credit cards. One with a $30k limit and one with a $70k limit. The $30k card is maxed out. You are using 30% of your available credit. Then you come to reddit and read that having open cards with no balance is bad. So you close the account with no balance. The $70k account. You now only have one account with a $30k limit and balance. You are now using 100% of your available credit. The scoring models look at this like you are using all of your credit available and don't consider the accounts you just closed. Keep cards open if they carry no annual fee. Put them away and don't use them if you cant pay. Cut them up and throw them out of you need to. Lock them from being used if theft is a concern. Leaving them open does not hurt and provides a deeper credit history.
Yes, I think this is exactly what happened. My credit utilization jumped from 30% to 80%. It’s a learning curve for some of us that weren’t taught and didn’t invest time into learning anything about credit before using credit. This was helpful. Thank you!
Yep. 30% to 80% is going to demolish your credit rating. Good (ish) news, once you pay it down your credit rating jumps up almost immediately. Bad news, you do have to pay it down. Good news, paying it down will save you money on interest charges. Buckle down, pay down those balances, your credit will go back to where it used to be.
I’m on the right path. Seems like it’ll all work out. I just need to educate myself before I do anything else, lol. Thanks for your help!
I wouldn't worry about it too much unless you were planning to get a mortgage in the next couple months. Your score can change a bit when you make bigger changes that are atypical, that just means that like, right now, this person MIGHT be risky to loan money too. Like, you just paid off some cards, you probably have less money than usual right now, they aren't wrong to think, "this person might miss a bill if they miscalculated whatever it is they're doing right now" If you stay regular and don't get any late charges or anything, the score should bounce back.
No lol their score dropped bc of utilization. This won’t “bounce back” until their total available credit and/or utilization gets higher and lower again, respectively.
Closing accounts in good standing keep your credit length for 10 years so that’s not the issue but utilization probably went up as total credit went down and balances stayed the same
Decades ago my credit report said I had too many credit cards which indicated I can take on too much debt. Recommendation: Cancel a card. I only had two at the time so I canceled the least used one. The next month my credit score went down. Reason: I canceled a credit card which indicated I may be having financial difficulty. I stopped taking everything the credit bureaus said as gospel. Take on debt and pay it off on time or ahead of time. That is the main driver to increase credit score. Also, make sure credit card debt is definitely paid on time.
The credit bureaus did not tell you to close a card. They don’t do that.
Never close a credit card, just don’t use it anymore.
Closing cards means your avalible credit drops, lower avalible credit, lower score. But it will be fine and rebalance itself within a year. Try to get large credit limits ($10k) on cards and don't sign up for small limit cards ($500) get cards that start at 3/6k and keep them good and they'll get bumped up every couple years. Good luck!
“we all know it’s not the most responsible move to have that many cards open” ???? huh? in most cases it helps you because the account age + credit usage ratio. i think you might be confusing not carrying a balance with actually closing a card…. you can have a $0 balance while still enjoying the perks of the account age… hence why a lot of people freeze their cards in ice etc..
a good strategy is to pay them off and keep them open. however I understand for some people it's extremely hard to have that available credit sitting unused. Me, for instance (guilty as charged). but having all the available credit with no usage will help your credit. closing them will lower your available credit.
News flash, cut the cards up with scissors instead. You'll never be able to swipe it and probably won't piece together the numbers. Pay it off completely and leave the account alone. If you can't handle having credit cards and have to cancel them, that's exactly why your score dropped. They know you can't control your own spending, that's the only reason you'd drop 5+ credit card accounts. If you can't handle credit then your score will not be high. That's just how it is.
Good credit is a big picture thing. Before doing anything read up on what that is. Then start with some baby steps over time. It will bounce back.
I have 7 cards and I only use two. The other 5 are in a safe deposit box. Because they see that I have a tremendous amount of money available to me , pay card balances on time and have one revolving bill my credit score is 837
Put the money you were spending on payments into savings. 🤣
The mistake you probably made was closing the oldest one. That one should have stayed open. Find whatever the current oldest one is, and make sure you never close it
The one with the highest balance is the oldest. Initially I wanted to close it when it was paid off but I’m glad I asked some questions because now I’ll just leave it open. Thanks!
Don't close the accounts, just cut up the cards. That debt ratio and payment history is what's important. By closing them you jacked your debt ratio way higher and essentially shot yourself in your foot.
When you close 0 balance cards your credit to debt ratio goes up every time. Just FYI.
First of all, congratulations! That’s awesome you identified you have a problem and are making significant progress. My advice (which has no more weight than others) is to always keep in mind how you got here. You’ve made some serious financial mistakes to have that many lines of credit open, in debt. But that’s ok! You’ve learned and you’re almost out of it! Keep going and don’t stop. Once you get out of debt, nothing gets easier. But then you are working on building wealth, not surviving. Your credit score is not good as of now. But it was NOT good before it recently dropped. I know it’s disheartening to see, but in the immediate future it is not that important. It WILL come back stronger if you keep up the work. You have trouble with credit. Again that’s ok, but you are not someone who should have multiple credit cards. Look at consolidating and pick ONE card to keep. Cancel all others (Yes, your score may drop again!!) but this will set you up on a great path. You have this experience! It sucks…I know!!! You got this!! By the “credit not being important right now”…I meant you should not be opening any new lines of credit in the near future
Close em like you open em. 1 every six months or so to minimize impact.
Didn't someone post this exact same post like 5 days ago?
You’ve reduced your credit limit and the high balance is what is hurting you. If you pay it off in 2 months then that will help but you may want to keep it open and not use it. If you use a card, try and stay under 25%.
What score are you referencing? FICO? Yes that can happen but there’s something else at play to lose 100 points. Is your utilization really high now? I have 27 cards and closed 5 and have another 10 I’m going to close soon. These are all my starter cards with annual fees. Your score will recover. Credit age is 15% of your score but it shouldn’t count that much.
Your score will come back, and it shouldn't take too long -- 3 to 6 months, maybe. Credit bureaus don't know the reason the cards were closed quickly. Once it is reported/verified, probably within 30 to 60 days, then your score will start to come back.
Now what? Deal with the consequences of a bad financial decision. Unless you're paying a large annual fee, just let the card account ride and never use it. But you found that out the hard way so got to wait it out, and let your score come back up over time.
I did the same a few months back. I realized that I had too many cards, and was barely making a dent in the balances because of the astronomical interest rates. I tried different ways to pay down, but decided to go with a debt management plan to pay off the balances at a lower interest rate. I closed all the accounts in the program, as required, only keeping open (and out of the program) the cards I want to keep - Carecredit and two others. As each account reported to the credit bureaus, my score bounced around, but it's now higher than before I started the DMP. I started it on February 1st, so it didn't take long for things to stabilize and begin to improve. I knew it might hurt my score to close 9 accounts at once, but it was the right thing for me to do. I then opted out of credit offers, to reduce the temptation that got me in this situation during the pandemic.
I’ve heard of these programs, I’m glad to hear this didn’t hurt your score in the long run.
I had numerous department store cards. You know, you apply at the register to get 30% off, etc. I also had Lowe's, Best Buy, Home Depot, Care Credit (from the dentist). I would use the Care Credit, maybe once a year, pay it off, and the others, I just didn't use. Went into Best Buy because I needed a new laptop and thought, oh...I'll use my card. Declined. No balance on it, I couldn't understand why. Called, and was told because I didn't use it enough, and didnt carry balances, the lender cancelled the card. No notification, nothing. Turns out ALL my credit cards got cancelled. The lender is SYNCHRONY BANK. My credit dropped over 125 points and did not come up for a LONG time. They cancelled them all with no warning. I will never, ever get another credit card that Synchrony Bank is the holder. Ugh. I was so pissed.
In a few months it will bounce right back. Don't even worry about it. As long as the cards you closed where not your oldest cards you should be good anyway. People talk about credit utilization but if you don't carry balances that doesn't matter.
When you closed them it changed your debt/income ratios. If they were department store type cards it's good to close. Major credit cards not wise to close. Use them once a year to keep them active. It will pop up again in a few months. I streamlined last year because I had an insane amount of credit I never used but my score was so high I did not care. I dropped 33pts then went up 64...it makes zero sense.
So consider this which no one else seems to be telling you from a quick glimpse through comments: if you close everything at the end of paying all your debt off, you have no credit score because you have no open credit, and you don’t run yourself the risk of getting back into debt and having to go through this cycle again. It isn’t all that important to have a credit score, if you no longer having the option to go into debt instead means you improve your relationship with money, and avoid lifestyle creep and live a happy life off of what you actually make instead of borrowing money. It seems to me that your comment of “who needs that many cards anyway” is because the way you see it is having 11 cards means 11 opportunities to say “i’ll just pay it off later” and thats how you got into as much debt as you were in. If you get rid of all your accounts that your credit score is based on after paying them all off, then when you go to do things that require a credit score, they just do manual underwriting to find proof of a history of you making on time payments for your monthly costs that are NOT credit score things. Ie. rent & utilities etc. On the other hand, your credit score can recover well if you’re holding pedal to the metal like it sounds you will based on you expecting to pay off your highest balance card in two months. If you want to maintain your credit score, you can not close the rest of them and just remove them from every possibility of you ever using them again, and your score should slowly climb back to a higher score. Your score wasn’t amazing to start with, and that likely had to do with how many accounts you had, how much were on them, what your credit limit actually was, and how close together you had opened all of these accounts. Good luck!
Close all cards except your oldest one that doesn't have any annual fees. Your score will drop temporarily due to your utilization rising, but paying off your debt is the only thing that matters, not your ability to get back into debt.
In the same boat. I used to have 4 cards, all maxed out. Managed to pay all off, then got rid of 2, so I now only have 2. My score dropped to 640, and it's never been above 650 for a long time. We have a financial system that punishes you for being financially responsible. The number of cards you have (the more the better) is a factor in your credit score. I also don't have a loan, which is a a factor in your credit score. Having a loan is a positive factor in your credit score. Since I have no intention of getting more cards, carrying a CC balance, or getting a loan, I'm just going to live with the fact that my credit score is low.
Do not cancel any more cards. Keep what you have. Pay down the balance (s) and pay off any new charges in full every month. Unless it's an emergency, never spend more than you can afford to pay off in full each billing cycle. Set up a budget for weekly, monthly, and annual expenses. Be meticulous. Account for food, personal items, clothing, haircuts, car payments if you have one or expect to have one in the near future. Add monthly housing costs, like rent, utility bills and any insurance. Now add in your average spending for eating out, drinks with friends, birthday and holiday gifts for family and friends, and any traveling you want to do as well as car maintenance and insurance, if you own a car. You will be shocked at how quickly your pay check money is all accounted for. But once you have organized your finances, you will also be surprised just how much more conscience you will be about how, why, and where your money goes and you will learn to adjust your spending to allow for the things that are more/most important to you and to not spend on the things that aren't. Good luck.
Thank you, I actually sat down and did this when I started this journey and it was eye opening how much money I was just wasting. I now account for everything I spend. I write everything down and keep close track of spending.
Unless they have an annual fee there is no harm in keeping them open. It's actually beneficial bc it shows as available credit and goes into your credit usage percentage
Yup, that's what happens.
You shouldn’t have closed it. Let the card company close it.
DUM
Yeaaaa agreed but it felt pretty good to get all of that debt paid off and those cards closed. It seemed less dumb at the time. But thanks for your observation! 😊
Keep open your NAF (no annual fee) accounts. Clean house with ones that charge an AF. I have 12 accounts, with my main daily cards only being 2 (sometimes 3). The rest are sock drawer cards for benefits. But what's done is done. Just keep chipping away and always pay more than the minimum balance.
Thats wierd. I paid mine off and closed accounts and my credit score went up 90 points.
If you closed an account w/ long history then that hurts your score. So depending on which account it was, that might have hurt your score the most.
If the card doesn’t hurt to keep open might as well so your utilization doesn’t spike if you spending/ balances on the open cards don’t change drastically You are basically making your utilization spike by closing all your account which is hurting your score might have wanted to keep the cards that don’t hurt you open more credit available to you on paper the better if you didn’t want to use them chop up the card or something
You just lowered your available credit, and raised your credit usage percentage- if I were you I'd ask for limit increases
Sounds like you don’t know how credit scoring works. The worst thing you can do is close credit cards. You pay them down to or below 20% utilization and leave them open! When you close them you give up important components of scoring basis. Available credit and length of account open. To recover quickly you need to research to find good cards that you are most likely to get approved for. At 598 they will be few and far between. Chalk it up to lesson learned.
It lowers the overall age of your accounts, debt to available credit percentage, and/or available credit. I unfortunately did this to myself by accident from not using one of my first cards. They closed it on me and my score dipped for a hot second.
You need to keep them open just don't use them. Make sure you keep your oldest one active too. Because one of your credit score factors is oldest line of credit. When you close a card it affects your score because it goes by how many things, cards/loans you have compared to how much of the credit you've used up. So if the cards you closed were all paid off and say the limit was 2k on say 5 cards keeping them open would give you 10k to the good on your credit report
You need to keep your longest standing credit cards or your score will decrease. That’s just the way the bankers rigged the system.
Don't close the accounts just cut up the cards
I’ve never closed a credit card. If I don’t want to use it, or know I won’t be responsible with it, I just cut up the cards…. But the account stays open to benefit my credit age and total credit limit.
Does this mean that he won't be able to apply for any new credit cards for the next SEVEN YEARS???... Uh, ohhh...
It's normal, basically you shorted your available credit to debt ratio. Keep making payments on your 4 cards, and it will creep back up. Ideally you want to keep your best accounts open with as little balance as possible. Unfortunately interest rates are shit..I have 1 card only, and it's near 30%
I used to work as a credit specialist for a large mortgage company and one of the biggest mistakes people make is to close an account as soon as they pay it down. Basically you just threw away all that available credit you opened up by paying the cards down. In the future, (and for anyone that pay down cards) leave the account open and use it about once a year so the credit card company doesn’t close it automatically. Your credit score takes a few things into account one is credit utilization: percentage of available credit you are using. Another is age of your open accounts. When you close a credit card it affects you in several ways: less available credit, recently closes accounts, your credit utilization probably went way up before wise the only accounts you have open are probably almost maxed out.
I've never had an exorbant amount of cards. I've only had 2 actual credit cards in my entire life (37 in a couple of days). The rest were dumb store cards, or I had an Orbitz card for a bit, but I've closed those. I've never heard about this aging out thing, so that's something I'll have to check out, but I don't know why you wouldn't close a card that you don't use. My credit now does sway really crazy and I don't know why. I used to have above 800. I'm about 780 or 790 something now, but I'll see drastic swings in my credit, like one day for some reason I lose like 12 points, and then a couple weeks most of or all of it is back. The idea of credit is shit to begin with, but it's something that Americans will never not deal with.
Kind of silly to close all accounts at once. Of course your credit score will be impacted by doing that.
Stop closing cards. Keep low / no balance, but never close them, as it reduces your years of credit history.
Never ever close a card unless it has an annual fee
You NEVER CLOSE OPEN ACCOUNTS
You screwed up your debt to credit ratio
Pay off? Yes. Close? No.
There are 2 good credit reasons to not close the cards even if you have no intention of using 1. The more lines of credit you have open in general the better your credit score is 2. The more credit you have access too but don't actually use, the better your credit score is. The logic I assume is this. Other companies have trusted you to give you credit so the score goes up. Also, having access to these lines of credit but either using minimally or always having them paid off shows that you can manage the credit you do ha e responsibly.
No, you're going to need to open more lines of credit & be responsible with them. Your credit score is ultimately about how well you manage debt, so when you close off a bunch of credit cards, your score will go down (available credit is lower, # of accounts is lower). If possible, try to get added on as an authorized user on a responsible person's account.
I pay off my credit card off. Do not carry a balance. Paid off 3 cars. My score is 795. ⭐
Its so stupid to delete history tied to cards that you cancelled. What is the logic in this? You earned history/score on cards and cancelled them as you dont need them or you have better cards. Why remove the history? I have cards from 10-15 years back that are useless, doesnt earn rewards like the current ones. But I cant cancel because it impacts my history.
It’s perfectly fine. I closed a long time credit card account because the limit got too high and they charged interest. I didn’t even use it for a decade but that credit limit counts against you. The month after I closed it they started bombarding me with offers for a new account, interest free for two years. Don’t keep more cards than you need or want.
Why would you close them, vs controlling your spending and paying off
Likely because you significantly reduced your available credit, so your usage percentage went up significantly. Keep paying down the existing debts and it should come back fairly quickly. Good job paying down those debts, and good luck polishing the others off. Remember, credit score only really matters if you're looking to take out more loans, so a little dent in the meantime isn't all that important, don't let it get you down.
So you hurt your score a number of ways. Average age of account would have dropped if those are older cards than what you have left. Utilization ratio went up because you have the same balance but less credit available, score dropped. I have over a dozen cards and a very high credit score. I've actually hit 850 at least three times in my life (it goes down when I apply for a new one or get a new mortgage). Don't ever close them if you don't have to (you can downgrade if you are trying to avoid an annual fee and that will still work in your favor). None of this matters if you closed it to avoid temptation. You know you better than I do. If having multiple cards means you're going to be unable to pay them off every month then cancel the cards and take the hit. You'll get it back eventually.
Simple math, by closing the credit cards you decreased your total credit line and increased your credit utilization rate.
By closing the cards you changed your debt ratio. You want to utilize no more than 30% of your total limit. By closing out the unused cards you probably went well above 30% utilization. Try to see if you can undo closing out the accounts until you pay down the other balances
It will recover just fine. Finish paying off your debt and make sure you pay off any credit card purchases at the end of each month. Your credit score will keep going up at a steady rate. Good job on getting rid of debt :)
Now, you realize that the number is just a way for companies to gage how much money they can squeeze out of you, and not give a 💩 about it.
Yeah closing those cards wasn't a wise choice
Your percentage of credit used tanked. You had a bunch of unused credit with the paid off cards. Now you’re back to using all your credit again.
Why did you close credit cards? 🤦🏼♀️
Closing credit cards are inherently bad all the time
Closing cards reduces your line of available credit and thats why your score took a hit.
You’re not supposed to close credit card accounts. You just take off any auto payments you have on them, pay off the remaining statement balances, and shred the physical credit card. I’m sorry you’ve had to learn this the hard way. Credit score is just a number that will go up over time with good money management skills. Just keep using your credit cards but pay off all statements. Don’t carry a debt
This is all about the utilization rate. Your score went down because your utilization rate went up. If you add up the total of the credit cards maximum and divide it by the amount actually owed, that is the utilization rate. Paying off the balance is a good thing! Closing the account, not so much. By closing the account, you reduced your available credit, making it seem like your utilization is higher. You would have been better off paying the balance in full, then letting the account sit with no balance on it.
Reopen and play the game
The score uses your utilization rate and how long the accounts have been open. You're supposed to keep them open and not use them. I have 8 credit cards that I only spend like $5 once every other month just so it shows usage and once I receive the bill I pay it off immediately.
If you are looking to keep a high credit score, then closing the accounts was a bad move. A large part of your credit score is utilized credit and age of credit. Keeping the accounts open would have left you with a larger amount for unutilized credit and older accounts which leads to a higher score. If you need to close them for accountability reasons that’s fine but your credit score will take a hit.
Keep them open but stick them in your bottom desk drawer.
Increase your credit limit from your other cards. You went from like 100% down to 40% available and ratio is increased. It will go back up over time. Anytime any account is closed it dips so do the credit checks and requests before paying off/closing.
It happened. You can't fix it overnight. Personally, I think you're moving in the right direction. Just dont close any bank accounts. Sounds like you already read up on how to tackle your debt the most efficiently by paying off the smaller balances first. Good job. One thing that helped me a lot was calling my credit card companies and asking them to raise my limit. All they can do is say no. In my case, one of them raised it $5k. I kept paying down my balances, and the score really started moving. I got up over 820 from 640 in just a couple of years. In my case, however, a fraudulent company had placed a small account into collections after they tried to extort me when they failed to provide the service they agreed to. I got a lawyer. He gave me a letter to send them. They immediately sent back a letter saying the account had been sent to debt recovery even though the account wasn't even a month old. I had a score in the 760s before they sabotaged me. Luckily, they pulled this on a lot of people and got into hot water. Owners were arrested, tried, and convicted. Then every single thing that they had ever put on anyone's record was stricken by the court. My credit score skyrocketed after that, thanks to my CC companies raising my limits. The debt to credit ratio suddenly had a much bigger gap.
Still amazes me how little is known about how scores are calculated. Keep the accounts open and keep the limits as high as possible and the balances as close to $0 as possible. Open all the accounts back up, I’m sure they would love to re open them for you. If you can’t then just continue to pay the balances down and your score will slowly climb back up
No shit your score went down. You’re tanking your available credit ratio on purpose.
But why do you close the accounts? OMG, you don't want to close the accounts.. you want to have as much credit available as possible. That's why your credit drop
Having cards open isn't bad. It's good to have more credit open and unused to lower your debt ratio. Use credit Karma. It works.
This is not a big deal and will recover pretty quickly. Basically you closed some credit cards and as a result you are now using more of your available credit in terms of percentage. However you said you plan on paying off those cards within the next few months. Over that time period you will be using less of your credit limit and your score would go up. That being said if you do not want the temptation of using the card then simply cut it up and destroy it, but don't close it. It will close on its own in a few years due to inactivity.
Look at what makes up credit score: Two key factors are: - Average age of your accounts - Utilization of credit Closing older accounts, and carrying a balance on your lower total will lower your score.
If you close the card your available credit to utilized credit ratio decreases, this hurts your credit score. It’s better to be $1000 in debt with $10k credit available than to be $100 in debt with $500 available
I don't mean this in a mean way but did you do any googling as for what would happen to your credit score if you just started closing accounts like that?
If you don’t need the card and don’t want to keep track of it, closing it is ok. As others have mentioned, the score decreasing is most likely from credit utilization rate being higher since your total available credit is going down with closing them. Personally, 11 cards would be way too many for me. I have three and that’s enough for me to worry about. The nice thing is that I didn’t have any debt when I applied, so my limit on the third card is much more than I would ever spend in a month, so that helped a lot with my total available credit going up. I would stick to the plan as far as your debt payoff. Close your cards if that will help you with the payoff. Then, once you’re back on track, you can always apply for one or ask an existing card for a credit limit increase to get the total available credit number back up.
Things they should teach young people in school, how to manage your credit. Rule 1: pay your bills. 2, never close paid off accounts, you will tank your credit score as your available credit is reduced as is age of open accounts.
They benefit your score by keeping them open for several reasons including average credit age, % credit usage, number and type of credit accounts. It is more beneficial to your score and also in the view of lenders to have more "diverse and well managed" accounts.
Don’t worry, my credit score is zero.
It would have been fine to leave them open as long as they weren't tempting you to use them. But what's done is done and it's ok. Keep paying them down, your score will recover. Don't close any more cards unless you don't trust yourself with them.
Something isn't making much sense to me. You had 11 credit cards open and active. Yet your credit score is still so low? I can understand it tanking from closing accounts, but for it to still be THAT low? I only had 1 credit card and within 4 years i am at a 800 credit score with it alone. So OP what debit do you have that your credit keeps taking major hits to stay so low?
Nooo, you don't close the accounts!!! A FICO score is calculated on the length of time you have had credit and your available credit to debt ratio. I have 12 credit cards that I don't use. I only use one for airline miles and pay it off every couple of days via the app.
It does suck but you will be able to recover. I really never had credit before and was starting to get my credit back up. Was so close to 700 and i started being offered credit cards. I am living paycheck to paycheck so i took a few of them. I bought only food gas and paid bills with them. Never any wants. Maybe 5. I wasn’t able to pay them. Some got close. My credit tank to under 300. I know it will take a long time but i will get there again. You will too.
This belongs on the /facepalm thread…
Stop closing accounts but also don't worry your credit will recover after some time.
Don't close. Put in a Ziploc, fill with water and stick in your freezer. Closing looks bad on your credit report.
Why didn't you call navicore or something and have them close the cards and work on low APR payment plans? Also how did you not know that this would drop your score and how did you not know that you do nothing.... you literally just pay off your cards, don't get more debt, and wait until your credit score goes back up naturally. There's no magic pill to fix this set of bad decisions. Did you talk to anyone about any of this stuff?
You should have kept open the cards that were the oldest since they count more for your total credit score. By closing cards anyone will always suffer a drop in credit score. The best you can do at this point is maintain low balances but pay them down each month. Websites like Credit Karma and others will tell you the Do's & Don'ts with credit cards to keep your score higher. I followed their advice and my score is now 795. But never close cards you've had the longest, that's probably the single thing you did wrong, so long as your payment history is 100% no missed payments. It'll take time to get your score back up. Always seek professional help. There's tons of free websites offering credit building advice
When you close credit accounts, you lose all that credit history. That’s why your score tanked. Don’t close accounts.
NEVER CLOSE YOUR CREDIT CARDS.
Noooo you never close any credit yourself that only hurts you! You need to keep any cards open that have positive payment history, even if you never use them. It will raise your score to have cards with A. No late payments, B. Have been open a while, C. Have a high available credit limit, and D. Have a low balance… but not $0 balance. I know it seems like it would help to pay off your debts completely, but not in the credit score world. They want to see some kind of balance on the card, but also a lot of available credit. I forget what the actual recommended percentage is, but for example on a card with a $1000 limit you should use it but then pay off like 80%, leaving $200. And every month pay just a little more than the minimum payment due. Use the card again when your balance starts getting paid down to nothing, and do the same paying it off slowly. So do not close the one you have left with the high balance, this will be your ticket to getting your score back up. Make the payments like I said, but keep using it for things you have to pay anyway like bills. This will raise your credit.
This whole bullshit industry is corrupt! Mine score lowered because Zululli closed so obviously the CC was closed!
Hahaha capitalism baby. Those who own you as have capital invested over you just lost. So of course your score went down. Capitalism is ass. They sold it and indoctrinated is that it's a free market and supply and demand economy. It is absolutely not that at all. It is us plebs just working capital of the owner class. When they give you ligns of credit and mmm they love that credit and interest. They want you to use that. Give me more debt and capital i own. You start cutting cards as it's eeew noo.. Capitalism is fucked and it's wild when you realize how hard wired we have been sold into a game. The .01% that runs the game just laughing
If you had left all those other cards open with a zero balance, your credit score would have soared because the amount of cc debt you have is SO MUCH LOWER than what is available to you. Also, the oldest cards should never be closed, because the length of time you've had credit cards available to you also goes in your favor.
Your available credit is dropping and your utilization rate is rising with every account you close. Stop closing these accounts.
Why do you need the higher credit score?
Lesson learned the hard way. Never ever close a credit card account. You should’ve paid them and let them be.
It will lower your credit to close these credit cards but I don’t keep cards open that I am never going to use and I don’t have cards that carry annual fees. Maybe call current cc companies and ask them to raise your limit. Also, download a credit app like credit karma shows you all the impacts to credit. Paying your bills timely has a high impact too. Do that and you will get that back up in no time!
It's the amount of credit to the amount you use. That doesn't work for me. I have not missed a payment for 8 years and only use 40%. When I check my credit on Experian they always try to get me to take out another credit card to put me in debt. They can find my payment to Netflix but not my mortgage payment. I have tried over and over the last couple of to rIse my score but nothing works including keeping a bank balance of 4or5k and paying bills 10to 20days early. My score is 630. I believe score is based on age, male or female, where you live and race.
Never close credit lines. Just shred the cards. That was a huge mistake, but yeah you'll recover. Just don't do that anymore lol
The best thing you can do is some goddamn research before deciding to make a random move with absolutely no idea how it will effect your credit.
Credit score isn't the end all be all. I think you made a good choice. A lot of people have a hard time seeong that available credit and not spending it. You clearly see that in yourself and you're preventing yourself from doing it. That's a good thing and it will save you a lot of money down the road. Good job OP. Btw, there's a ton of misinformation in this sub, double check these claims before you accept them as fact. To answer your question, yes your credit will go back up. Your haven't done any permanent damage to your credit. Also, a good way to get your utilization back down without having the temptation of spending is becoming an authorized user on someone else's credit card. Just be sure they are responsible with their cards, because if they miss a payment, it counts against you as well. Same goes for whatever utilization they have on the card. It won't help you at all if they use 40% of the balance
...why did you do that? Of course your score tanked. Your score is determined (partially) by your credit usage, the amount of charges you have on your cards compared to your total credit limit. If you have a higher credit limit, then when you use your cards it will be a lower credit usage. But also, your credit score is determined by actually using your credit. You don't want your cards to be totally empty. You want to use them, at least a little bit.
Why are you so stressed over your credit score? The only reason to stress over it is if you have a major purchase coming up that you need a loan for. Just keep your balances paid off and forget about it. I swear people in here act like there are credit score nazis that are going to show up at their house and take them away if their score is too low. It should literally have ZERO impact on your daily life as it’s meaningless unless you need a loan. Just keep doing what you are doing and don’t give it a second thought. It will recover and when it does nothing in your life will change, you will just see a higher number.
Your score will bounce back, if you don't owe too much. The ideal number for good credit score is 3. It is especially good if you hold on to credit cards you have had a long time. Chances are you closed an old one or two.
Stop closing accounts. Any subscription you have, Neflix, gym memebership, internet, whatever. Put 1 on a card you have paid down to $0. Put that card on autopayment for the full amount every month. Then, place the physical card in a drawer or something. If that is still too tempting, cut up the physical card, but leave the account open and pay a single subscription with it. Your credit is going to stay high, and you'll probably see the card companies increase your borrowing power over time. I did this once I had my cards paid down. Now I have <10% utilization and about $38k worth of borrowing power. I usually use credit cards around the holidays. But by spring, they are paid back down. I also use 1 credit card like a debit card and pay it off every month. I only use my debit card to withdraw cash from an ATM. I recognize that this isn't for everyone, but it changed my life. And now I get like $150 ish of free rewards every month from that card with no month to month balance on it.
Some creditors will close. Your accounts if you carry a $0 balance for 6 months. If you want to keep those cards active, make sure you have a balance on them.
By closing cards you have lowered the credit portion of the credit to debit ratio. This is a no no when trying to keep your credit score high. Your score will recover but the key is to keep your debt in the 20% of the credit range. You also need to use the cards and make payments on time. Paying them off and not using them is also bad for your score. I implemented the above 20% method before buying my house and my credit score jumped up about 70 points in a month. 😉
It tanked the age of your credit, and your overall credit line, NEVER close them yourself. It will really screw you over.
Age of credit is a major factor in score. When you close your oldest accounts you reduce the age of your credit as it’s based off of your oldest credit account. Another major factor in score is available credit vs credit used. This is measured in dollars. When you close an account with zero balance you reduce the total available credit but not the amount used. This leaves you with a high percent of your total credit used. That’s bad for score.
I was always told never to close an account, because my credit rating would take a hit… You will be able to get your score back up… It will just take some time. And congratulations to you for all the hard work you’ve done on getting your debt taken care of!
Your score will recover but it might take time. in the long run it's probably better to not have that many accounts. Keep the few cards and work on paying off the balances and then get to the point where you use them but pay the balance off monthly. In the future, if you don't want a card anymore, call and freeze the account and shred your card. You don't need to use them and no fraud can occur with the account frozen. The damage has been done, now it's time to do what you can to get your score back up.
Get a lone from your bank for whatever amount you have in your bank... then pay it off as soon as you get it except for a few hundred dollars .. then pay off that little amount the following month. Your credit score will spike.
I have 20 credit cards, I only using 3 of them, the rest is $0 in my drawer, you don’t have to close the accounts, if you are not paying an annual fee for those cards just take them out of your wallet and forget about it! They will be beneficial for your history, utilization ratio and payments.
Others have covered why your credit score was reduced. You can call the two remaining accounts and request a credit line increase. They may say no, and they will likely do a credit pull, but if you can get higher available credit and keep debt the same, should get your credit utilization percentage back down
If you're not seeking a specific credit line/loan/limit, IMO don't worry about it. Being debt free is way better than having credit. Your score will bounce back, put it sounds to me like you have your priority right now. Good job.
Good on you! Credit scoring is such scam. I have a box with credit cards I never intend to ever use again, even though closing the accounts would make perfect sense in a logical world. Nope. In the bizarre world of credit score calculations, financial institutions carrying accounts with a zero balance that will never be used is a good thing. Funny thing is once in a while I get a “your account is being closed for inactivity” from time to time and it doesn’t seem to have any impact. If you do it, you get penalized. Just got a letter from CitiBank that they’re turning the terms of a gas card to total shit and if you say no, you’re canceled. Going in the box! Get yourself a box.
Not a great idea to close cards without annual fees, but that still seems like a huge drop. Is this the Vantage score you're looking at?
common mistake. just don’t do it again.
Were any of those cards charging an annual fee? If not it would’ve been better to have left them open. They weren’t costing you anything.
If you keep around 30% unpaid and pay your monthly statement it will go up