It Pays to Know When to Close Accounts

If you want to raise your credit score and lower debt, don’t do it by closing accounts. To determine your score, lenders look at how much of your available credit you’re using. If you’ve closed accounts and still have balances, you’ll appear to be using more of your credit. If your credit card issuer has raised your interest rate or added a fee, it might be worthwhile to close the account but your score will suffer, at least temporarily. Be especially careful about closing accounts right before applying for a loan.