Does closing a credit card hurt your credit score?

All lenders will look at an individual’s credit score to determine if that person is credit-worthy or a credit risk. Credit scores are generated by credit scoring companies, with FICO^® Scores being the most widely used. Your FICO Score takes into consideration a Credit Utilization Ratio. This ratio looks at your total used credit in relation to your total available credit; the higher this ratio is, the more it can negatively affect your score. So, by closing an old or unused card, you are essentially wiping away some of your available credit and thereby increasing your credit utilization ratio. Here are some Tips for Improving Your Credit Score.