Legal Question in Credit and Debt Law in California

Re: Credit Card Cancellation

Unfortunately, this isn't really a legal question, so I'm not sure I have the answer. I can give you my understanding of the process, but oddly enough, I'm not aware of a professional who can assist you answering this question except for a mortgage broker who is extremely familiar with credit scoring (but will he/she be willing to give you free advice on credit scoring?) or someone in the credit counseling business, and it doesn't sound like you are in need of that service.

As I understand the FICO scoring, the impact of closing the account will have on your score is two-fold. First, if you have had the account for a long time, closing it may reduce the average age of your credit accounts; age (meaning how long you have had established credit) is a factor in determining a FICO score. Second, if you have available credit on this card, but not as much free space on other cards, your "utilization ratio" goes up. In other words, the more un-used revolving credit you have (to a point), the better, and if this one is paid down to 33% of your limit, and then just kind of held there, it probably does more for your score than closing it. Again, these are not legal questions, and my answers are anecdotal - you need to find a professional in the credit industry to answer the question.

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