Closing a Credit Card Account will help your credit score. TRUE OR FALSE?

cClosing a Credit Card Account will help your credit score. TRUE OR FALSE? Answer in a minute.

Since today is Black Friday and I didn't do my Black Friday Open House-Maybe next year,I decided to write a blog about credit. Wanted to write this blog yesterday but I needed a rest. Heck I still need a rest. With Christmas less than 30 days away-TIME FLIES I TELL YOU,people are going to be buying gifts for their loved ones. While this is the season to be jolly,you also don't want to bring pain on yourself too trying to get something for someone that they might not use for a long time or not use at it. (Ex: Either get a Gift Card or Gift receipt so that they can exchange the gift in case they don't like it)

I liked a comment that  Karen Winters posted on her Facebook profile this Wednesday.

Karen Winters

Very good advice from "the money coach" Lynnette Khalfani-Cox-"Giving
is nice. But don't give the "gift of debt" this holiday season."

Don't give the "gift of debt" as in don't put yourself in more debt than you are already in. Don't pay for gifts with that plastic (credit cards),use cash if you have to. How come somebody didn't tell me this years ago? You live and you learn I guess.

So the answer to my question which probably most of you already know "Closing a Credit Account will help your credit score? FALSE. I know. I know. I thought so too. Many consumers don't realize the impact this action will have on several areas of their credit score. While paying off credit card balances will have a positive effect,closing an account will affect several of the consumer characteristics of a VantageScore credit score,in particular the utilization rate.

A consumer with two credit cards each with a $5,000 limit has a total credit of $10,000. Having a $5,000 balance on one card and a zero balance on the other means the consumer's overall utilization rate is 50 percent. If the consumer closes the account with the zero balance,the total available credit drops to $5,000 and the overall utilization rises to 100 percent.

An increase in utilization can have a negative impact on a credit scores.

Consumer Characteristics Contributing to Credit Score

• Payment History-32%
• Utilization-23%
• Balances-15%
• Depth of Credit-13%
• Recent Credit-10%
• Available Credit-7%

Closing an existing credit card account also hurts a credit score because it erases the length of credit history, which is calculated as part of "Depth of Credit.". If a consumer must close an account,closing the oldest account is the least favorable option because the longer a line of credit is open,the more history a consumer has accumulated.