People often think that if they pay off a credit card or don’t use an existing card and then close the credit card account that they’ll get a better credit rating or raise their credit score. This is not the case and here’s why.
Let’s say you have two cards or more from the same credit card company. You do not want to close these accounts.
Credit scores are determined by what types of credit you have and how long you’ve had your accounts open. They look at your payment history too. Even if you’ve had a credit card for 15 years or more and have an excellent credit rating, FICO score and credit history and you go ahead and close it, you can do a lot of damage to your credit score, and especially if it’s the card you’ve had the longest and it’s still an open account.
No matter how many credit cards you have, and no matter what your credit history is, no matter how many payments you’ve made on time or not on time, no matter how many late fees you’ve paid or not paid, it doesn’t matter. The standard advice from the credit card experts is NOT to close any credit card account.
If you are working on bad debt credit consolidation you don’t want to close you credit card accounts.
Let’s say you are paying a high annual fee on a credit card and that may be reason enough to want to pay it off and close the account. Don’t do it. First contact the credit card company and ask them if they will demote (use this word when you ask) your card to a card without any annual fee. That way you can still keep your credit rating and credit score intact and you’ll avoid paying the higher fee as well.
You can do this calling the credit card company’s toll-free number. Ask for customer service.
In any event no matter what happens when you call customer service don’t close the account. You can always ask for a supervisor and if you still don’t get anywhere then ask for the customer retention department. This department is not common knowledge and they have a lot more power to give you what you want or need.
Of course you want to do everything in your power to keep your credit rating up and as high as possible. But getting rid of or closing a credit card account will only cause a possible drop in your rating or credit score. Make sure you get your copy of your personal free annual credit report online to check the status of your accounts.