Friday’s Credit Tip #15: Don’t Make the Mistake of Closing Credit Accounts Just to Improve Your Score
This seems like a contradiction, but it really is not. Many people think that to improve their credit score, they just have to pay off some debts and close their accounts.
This is not exactly accurate, and there are several reasons to think carefully before closing your accounts.
First, if you close an account you need then you will have to reapply for credit, and all those inquiries from lenders will cause your credit score to actually drop.
Second, credit bureaus give high favorable points to those who have a good long-term credit history. That means that closing the credit card account you have had since college may actually hurt you in the long run.
In the short term, closing accounts will lower your credit score.
Check back next Friday for another credit tip!
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