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Article: What happens if the bank yanks my credit card?(CREDIT CARDS: Q&A)(Column)
- Article from:
- Kiplinger's Personal Finance Magazine
- Article date:
- September 1, 2008
- Author:
CopyrightCOPYRIGHT 2008 The Kiplinger Washington Editors, Inc. This material is published under license from the publisher through the Gale Group, Farmington Hills, Michigan. All inquiries regarding rights should be directed to the Gale Group. (Hide copyright information)
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Q: I received a notice from Capital One that it is closing my credit-card account because of inactivity. If the company closes the account, will it hurt my credit score?
Whether you or the issuer cancels an account, the effect on your credit score is the same--and it's not good. Fair Isaac, the firm that created FICO credit scores, calculates your score based on five criteria: your payment history, the amount owed (which includes the percentage of total available credit you are using), length of credit history, new credit and types of credit used.
The "amount owed" makes up nearly one-third of your score. So if an account is closed, your total available ...