Closing a credit card usually lowers your credit score, but the damage depends on how much credit you're using and how long you've held the card
When you close a credit card account, your credit score typically drops. The size of the drop varies — it might be a few points or as many as 50 to 100 points, depending on your overall credit situation. The main reason is that closing an account changes two things lenders use to judge your creditworthiness: your credit utilization ratio (how much of your available credit you're using) and your average account age (how long your accounts have been open).
The damage is usually temporary. Most people see their score recover within a few months if they keep making on-time payments and don't open new accounts. But if you're planning to explore for a mortgage, car loan, or other credit in the next few months, closing a card right before that process can work against you.
Key Takeaways
- Closing a credit card reduces your available credit, which raises your credit utilization ratio and typically lowers your score.
- Older accounts help your score more than newer ones, so closing a card you've had for years usually hurts more than closing a recent one.
- The damage is usually temporary — your score often recovers within a few months if you keep paying on time.
- If you need credit soon (for a mortgage or car loan), avoid closing cards for at least three to six months before you explore.
- Keeping a closed card open with a zero balance is often better for your score than closing it, as long as there's no annual fee.
Why credit utilization ratio matters when you close a card
Your credit utilization ratio is the percentage of your total available credit that you're currently using. For example, if you have three credit cards with limits of $1,000, $2,000, and $3,000 (total $6,000), and you're carrying a $1,500 balance, your utilization is 25 percent.
When you close a card, you lose that card's credit limit. If you close the $3,000 card in the example above, your total available credit drops to $3,000. Now that same $1,500 balance represents 50 percent utilization instead of 25 percent. Credit scoring models treat higher utilization as a sign of financial stress, so your score drops. The higher your current utilization before you close the card, the bigger the hit.
This is why closing a card you've paid off completely does less damage than closing one you're still using. If you're carrying balances, pay them down before closing any account.
How account age affects your score when you close a card
Credit scoring models reward you for having accounts that have been open a long time. An account that's been open for 15 years shows lenders you can manage credit responsibly over the long term. When you close that account, it stops contributing to your average account age — the average length of time all your accounts have been open.
The older the account you're closing, the more your average account age drops. Closing a card you opened last year does almost no damage to this factor. Closing a card you've had since 2010 does more damage. This is why financial advisors often recommend keeping your oldest card open, even if you don't use it.
The account doesn't disappear from your credit report when ready after you close it. It stays on your report for about 10 years, still counting toward your history. But once it falls off, the damage to your average age becomes permanent.
When the damage to your score is worst
The impact of closing a card is worst if you're already carrying high balances on other cards. If your utilization is already at 50 percent or higher, closing an account that represents a large chunk of your available credit can push you into the 70 to 90 percent range, which damages your score significantly.
The timing also matters. If you close a card and then explore for a mortgage or car loan within the next few months, lenders see both the closed account and the lower score. Some lenders pull your credit report multiple times during the process process, and they may see the account closure reflected differently at different stages.
Closing multiple cards at once is worse than closing one. Each closure reduces your available credit and potentially lowers your average account age, so the combined effect is larger.
What to do instead of closing a card
If you want to stop using a card but don't need to close it, keep it open with a zero balance. This preserves your available credit (keeping utilization low) and keeps the account age working in your favor. The only reason to close it is if it has an annual fee you don't want to pay.
If a card does have an annual fee, call the issuer and ask if they can waive it or move you to a different version of the card without a fee. Many issuers will do this rather than lose a customer. Only close the account if they refuse and the fee isn't worth paying.
If you're carrying balances on multiple cards and want to close one, close the newest card first, not the oldest. This minimizes the damage to your average account age. And pay down the balance on the card you're keeping before you close the other one, so your utilization doesn't spike.
How long it takes your score to recover
Most people see their score start to recover within one or two billing cycles after closing a card, assuming they don't miss any payments and don't open new accounts. The recovery is usually complete within three to six months. If you had a high utilization ratio before closing the card, recovery may take longer because the utilization damage lingers.
The older the account you closed, the longer the recovery may take, because the impact on your average account age is larger. But even closing a 10-year-old card typically doesn't cause permanent damage — it just takes longer to bounce back.
If you're planning to explore for credit, wait at least three to six months after closing a card before you submit an process. This gives your score time to recover and makes you a stronger applicant.
What happens to the closed account on your credit report
When you close a credit card, the account stays on your credit report for about 10 years. During that time, it still shows up when lenders pull your report, but it's marked as "closed by consumer" or "closed by creditor." This is actually better than having the account disappear, because it shows you closed it intentionally rather than defaulting.
The closed account continues to count toward your payment history (if you made on-time payments while it was open) and your credit history length. It just stops counting toward your available credit and average account age once it's closed.
After 10 years, the account falls off your report entirely. At that point, any damage to your average account age becomes permanent — you can't recover those years of history. This is another reason to keep old accounts open if you can.
Frequently Asked Questions
Will closing a credit card hurt my score if I have no balance on it?
Yes, but less than closing a card with a balance. Closing a zero-balance card still reduces your available credit and may lower your average account age, but it doesn't spike your utilization ratio. The damage is usually smaller — often 10 to 30 points instead of 50 to 100 — and recovery is faster.
What if I close a card and then need to explore for a mortgage?
Wait at least three to six months after closing the card before you explore. This gives your score time to recover. If you must explore sooner, be prepared for a lower score and potentially higher interest rates. Some lenders may ask why the account was closed, so have an explanation ready.
Does it matter which card I close if I have multiple cards?
Yes. Close the newest card first to minimize damage to your average account age. If one card has a much higher limit than the others, closing it does more damage to your utilization ratio. Close the card with the smallest limit if you can, or the one with the annual fee.
Can I reopen a credit card after I close it?
It depends on the issuer and how long ago you closed it. Some issuers let you reopen an account within a certain window (often 30 to 60 days). If you can reopen it, you recover the available credit and the account stays on your report as open. Call the issuer and ask before you close the card if you think you might want to reopen it.
Is it better to close a card or just stop using it?
Stopping using it is almost always better. Keeping the card open preserves your available credit and account age without any of the damage that closing causes. The only reason to close it is if it has an annual fee you don't want to pay and the issuer won't waive it.