Can Canceling Long-History Credit Cards Hurt My Credit Score?

Canceling a credit card account with a long history can reduce your credit score if the credit card account had been in good standing for its duration. If your longstanding credit card account costs nothing to keep open and your payment record on the account is good, consider keeping the credit card account open instead, if possible, to keep your credit score from taking a knock.

Credit Score Impact

Credit scores are calculated according to a consumers payment and credit history, types of credit accounts, new credit accounts, credit inquiries and credit card ratios of available credit to current debt. Canceling a credit card account with a long history impacts your credit and payment history and potentially the type of credit and credit-to-debt ratio aspects of your credit score. Credit scoring agencies weigh payment history the most heavily in factoring a credit score -- 35 percent. Credit-to-debt ratio is next in importance, totaling 30 percent of an overall credit score, followed by credit history at 15 percent and types of credit at 10 percent. These figures are approximate, as credit scoring agencies closely guard their scoring formulas.

Credit History/Payment History

According to credit reporting agencies, credit history is different from payment history. Credit history indicates the length of time you have maintained credit accounts, including credit cards, mortgages and other installment loans. Canceling credit card accounts that youve had open for a long time can potentially decreases your overall credit history. The impact on the credit history category of your credit score will be less substantial if you keep open other credit card accounts with similar long histories. Credit card accounts with long, positive payment histories illustrate responsible credit management to potential lenders.

Types of Accounts

Credit card accounts are revolving accounts, which means they can stay open indefinitely. Installment loans, such as car loans and mortgages, on the other hand, close when the account gets paid off in full. Potential creditors prefer to see a mixture of revolving and installment loans on a credit report. Closing credit card accounts with long histories can skew the mixture of credit accounts factored into your credit score, ultimately lowering your score.

Credit-to-Debt Ratio

Canceling a credit card account with a long or short history usually immediately impacts your overall credit-to-debt ratio, affecting your credit score. This calculation expresses your total outstanding debt in relation to the total amount of credit available to your overall accounts. The available-credit portion of your credit-to-debt ratio falls when you close the credit card account if you had a low balance on the card.