Closing accounts can affect credit scores

Credit scores can affect all aspects of a consumer’s personal finances, which is why people may care to know what can affect a credit score.

Recently, the Star-Ledger Wire Service ran a story provided by Bankrate.com in which a reader wondered how cancelled credit cards affect a credit score. The reader wondered how canceling a credit card that was never activated might affect their credit.

Relying on data from FICO, Bankrate.com noted that it would depend on whether the credit card was reported to credit agencies. If it was, then closing it could slightly affect a credit score.

“If you cancel the card after the issuer reports it, the closure could ding your score,” the story noted. “If you cancel it before it gets reported, then it won’t harm your credit rating.”

Along with closing accounts, there are other ways credit scores can be affected. Those would include consumers not paying bills on time or using too much of their available credit.