Does Closing a Credit Card Hurt Your Credit Score? The Two Ways It Can Backfire

The Call We Get After Someone Cleans Out a Wallet

Damon Boswell takes a familiar call at Mortgage Help ASAP: a client paid off a card they no longer use, called the issuer to close it, and then watched their score drop. Ashley Boswell explains that this is one of the most common self-inflicted credit wounds, and it almost always comes from good intentions — simplifying finances, avoiding temptation, or cutting a card with an annual fee. The problem is that closing a card does not just remove the card; it removes the credit behind it.

Damon & Ashley Boswell want clients to understand the two specific mechanisms that make closing a card hurt, so they can decide with their score in mind instead of against it.

Hit One: Your Utilization Goes Up

Damon Boswell starts with the impact that hits fastest. Closing a credit card removes that card's limit from your total available credit, which raises your credit utilization ratio — the percentage of your available credit you are using. U.S. Bank, Experian, and Citi all confirm that closing a card increases your utilization, and experts recommend keeping it below 30%. Ashley Boswell walks through the math: if you have $10,000 in total limits and $2,000 in balances, your utilization is 20%. Close a card with a $4,000 limit and your total limit drops to $6,000 — your utilization jumps to 33%, crossing the threshold where scores start to suffer.

Damon & Ashley Boswell note that this hit is immediate and can be significant, especially if the closed card had a high limit or was one of only a few accounts. Because utilization is roughly 30% of a FICO Score, a sudden jump can move your score by dozens of points in a single cycle.

Hit Two: Your Credit Age Shrinks

Ashley Boswell covers the slower, second effect. A longer credit history has a positive impact on your score, and closing an older card can reduce the average age of your accounts. U.S. Bank and Citi both note that canceling an older card can lower your average account age and affect the age of your oldest account — both of which feed into the length-of-history factor, worth about 15% of a FICO Score.

Damon Boswell adds a reassuring detail: a closed account in good standing can remain on your report for up to ten years, so the age benefit does not vanish overnight. But eventually the account falls off, and if it was your oldest card, your average age can drop at that point. The Boswell team factors in both the immediate utilization hit and the future age hit when advising a client on whether to close a card.

When Closing a Card Is the Right Call

Damon Boswell is clear that closing a card is not always wrong. If a card carries a high annual fee you are not earning back in benefits, and the credit impact is manageable, closing it can be a sound financial decision. Ashley Boswell also advises closing a card if it is a genuine spending temptation you cannot control, because a missed payment is worth far more to your score than the utilization bump from keeping it open.

Damon & Ashley Boswell also tell clients that a compromised card can simply be replaced by the issuer without closing the account — a new card number keeps the tradeline and its limit intact. The Boswell team helps clients weigh the financial cost of a fee against the credit cost of the closure so the decision is made with eyes open.

What to Do Instead of Closing

Ashley Boswell's first alternative: keep the card open and use it for a small recurring charge — a streaming subscription or a single gas purchase — paid in full each month. This keeps the account active, preserves the limit in your utilization calculation, and maintains the account's age. Experian recommends keeping unused cards open to preserve credit history and available credit. Damon Boswell adds that if a fee is the issue, ask the issuer about downgrading to a no-fee version of the card, which keeps the same tradeline open without the annual cost.

Damon & Ashley Boswell also suggest requesting a product change rather than a closure — many issuers will move you to a different card within their portfolio without a new hard inquiry and without closing the original account. The Boswell team has saved clients' scores simply by redirecting them to a product change instead of a closure.

If You Must Close One, Sequence It

Damon Boswell tells clients that if a closure is unavoidable, time it away from any major application. Pay down other balances first so your overall utilization can absorb the loss of the closed card's limit, and never close a card in the months before a mortgage pull. Ashley Boswell notes that if you are closing a card with a high limit, consider asking for a limit increase on a remaining card first to offset the lost credit — though the Boswell team checks whether that request triggers a hard inquiry before recommending it.

Damon & Ashley Boswell also remind clients to confirm the balance is truly zero and that no pending charges or recurring subscriptions remain before closing, because a small residual balance can reopen the account and turn into a late payment.

Let Damon & Ashley Boswell Protect Your Score

Closing a credit card is one of the easiest ways to accidentally lower your score, but it is almost always avoidable with the right alternative. If you want Damon & Ashley Boswell to review your cards, calculate exactly how a closure would affect your utilization and account age, recommend a product change or a keep-it-active strategy, and make sure nothing you do quietly undoes months of credit progress, Mortgage Help ASAP is ready to help. Reach out today and we will help you simplify your wallet without simplifying away your score.