Closing credit card———reduces credit score

dazzaofdagenham

so over the last few months ive closed a few of my credit cards…..

Closed 2 x Amex and my barclaycard, ..lack of use and increased annual fee etc

Why would doing these actions reduce my credit score ?

Emmia

Your score is meaningless - the reduction is probably because there has been a closure activity, which would be a change.

Ignore the score

la531983

Because the day ends in a Y

Or the sky is blue.

Its a made up number, used to cross sell you other credit products. You can safely ignore it.

flaneurs_lobster

Why do you care?

CliveOfIndia

To echo what others have said, the score generated by the CRAs is nothing more than a marketing gimmick. It will drop in response to any change in your credit circumstance whether good, bad or indifferent.

Lenders will generate their own internal score, based upon the raw data contained in your credit file along with their own unique lending criteria. They do not use - indeed, they cannot even see - the meaningless score generated by the CRAs.

MyRealNameToo

https://forums.moneysavingexpert.com/discussion/6661190/closing-credit-card-reduces-credit-score

Scores are made up by the marketing teams in the CRAs, no lender ever sees them. These days many showing you a credit score will also be trying to sell you credit products for which they receive a commission and so its probably no surprise that they may tweak their scoring systems to encourage people to generate commissions for them.

When an account is closed there is no reason given on the CRAs so the next lender won't know if you closed them for some reason or if the bank got spooked about something and closed them without your consent. The lack of adverse payment markers or CIFAS loading should suggest it's not for the worst reasons but they still won't know. The fact there are multiple closures at the same time can compound this.

Similarly lenders like people who other lenders trust. Like most things with credit risk everything is a bit both yin yang they like to see a trusted peer is giving you a £30,000 credit line but are also worried of what happens if you max that out. So you are now showing less people are trusting you, if they were your higher credit limited cards this can have more of an impact. At the same time this is partially offset by the reduction in overall credit available to you. How that relates to your income will determine by how much.

Are you actually looking for new credit in the near future? If you arent the whole lot is even more irrelevant than just the made up score.

surreysaver

Any change in your credit history will cause a change in your credit score.

It doesn't mean anything other than there's been a change.