Think Twice Before Closing Old Accounts

by Gerri Detweiler

When people order their credit reports, they almost invariably find accounts on their credit report that are listed as open when in fact they haven't used them for a long time, and don't intend to use them again. Revolving accounts such as credit cards are rarely closed unless you specifically ask the lender to close them. You can call or write to the lender (the contact information should be in your credit report) and tell them you want to officially close the account and have it listed on your report as closed at consumer's request. They must, by law, honor your request.

But before you close all your old inactive accounts, consider the impact doing so may have on your credit worthiness. Sometimes closing old accounts can actually hurt your credit rating because it will shorten the average length of accounts on your credit file, making it appear you have a shorter credit history than you actually have. It may also decrease your available credit so if you carry balances you may have a higher ratio of current balances to available credit, which may be harmful. It can also affect a positive mix of credit references.

I know you've heard that having too much available credit can hurt your credit rating. That may be true of some individual lenders, but Fair, Isaac Co., creator of the popular FICO scores, says they do not consider the amount of available credit as a stand-along factor. In fact, FICO says that closing old or inactive accounts can never help your credit but can only hurt it. If you do want to close out old accounts, do so slowly and selectively. And make sure you leave some of the older ones open for good measure.

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About the Author

Gerri Detweiler is considered one of the country's top credit experts. She is co-author of Stop Debt Collectors Cold, (, and has been interviewed in thousands of radio, television and print newstories including USA Today, The Wall Street Journal, The New York Times, Dateline NBC and many others. She has testified before Congress several times and worked on reform of the national credit reporting laws. Contact gerri at: to learn more.

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