Closing Your Credit Accounts Safely

We all know that closing a credit card account almost always brings down your credit score.  Like most everything to do with FICO numbers, it is a case-on-case basis, with the same action sometimes netting two different cardholders varying results.

If you absolutely need to keep your credit score clean (when you have pending mortgage application, for instance), it might be prudent to avoid doing anything that can potentially put your credit score in trouble.   As such, put off closing your accounts for another day.

A Safe Way

Want to know the safest way to close credit card accounts?  Here it is:

1.  Try to bring down your total revolving balance to as close to zero as possible by paying off as much of the debt as you can.

2. Start closing accounts one at a time.  Never close two or more accounts at the same time.

3. If you have zero balance (or a very low one), close the largest credit card account first.  If you have a considerable balance remaining, close the one with the smallest credit limit.

4. When you close an account and have a floating balance, try to negotiate a higher credit limit for at least one of your remaining cards - that should offset any loss of credit line you will receive from the closed account.

5. Once you close an account, always check within the next month or two how it affects your credit score.  If the effect is minimal, you can begin plans to close another account.  Otherwise, try to wait until your rating improves again before closing more accounts.

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