Does Closing a Credit Card Affect Credit Score?

Credit Card
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Does closing a credit card affect your credit score?

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I had the perception that closing a credit card would not significantly impact my credit score, but when I did, I noticed a slight shift.

First, your credit utilisation goes up. Say you have 2 cards with a combined limit of ₹2,00,000 and you spend around ₹40,000. That is a comfortable 20%.

But if you close 1 card worth ₹50,000, your total limit drops to ₹1,50,000. Now, the same ₹40,000 looks like a 27% usage, and that slight jump can pull your score down, as lenders prefer you to stay below 30%.

Then there is credit history. I learnt the hard way that shutting your oldest card is not wise. It cuts down the average age of your accounts, and a shorter history weakens your score.

And of course, credit mix matters too. Lenders prefer seeing both unsecured and secured credit. If you close your only card, you lose that balance.

So yes, closing a card can affect your credit score range in ways you do not expect. If you really need to close one, just avoid the oldest card and keep your spending under control. That is what I follow now.