A person with a long-held credit card considers closing it after paying off the balance. Parents advise against closing it, fearing it may lower credit scores. The credit scoring system is complex, with factors such as credit utilization and length of credit history at play. Closing a long-term credit card could adversely affect overall credit scores, particularly the FICO score, which is commonly used by lenders for evaluation. Understanding the implications of credit card management is crucial for maintaining good credit.
When most people talk about credit, they're referring to your FICO score, which something like 90% of lenders use to evaluate your creditworthiness.
Closing a long-held credit card can negatively impact your credit score because it affects your credit utilization ratio and the length of your credit history.
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