How to Close Your Credit Cards without Affecting Your CIBIL Score?

At times, one needs to close their credit card for several unseen reasons. When you want to switch to another card or are upset with the annual fees you need to pay, closing your present credit card becomes a necessity. But, one must remember not to change their cards too fast. The decision to change your credit card might affect your CIBIL score, and hence, it is important to consider several notable factors before closing your credit card. This article will focus on ways to close your credit card detail without affecting your credit score.

When should you consider closing your credit cards?

Let’s look at some of the reasons to close your credit cards.

  • High fees or interest rates:

Choose credit cards with minimal fees and charges, like the Kotak811 credit card. Regardless, if you have a credit card that levies stiff annual fees far higher than the market rate, it may be wrong to hold it. Closing such cards should help you prevent incurring needless borrowing expenses each day.

  • The temptation to overspend:

Some lenders even promise to give you cool rewards or special privileges, which might make you want to spend more so you can collect those points. Another way to break this habit is by closing your card.

  • Simplifying finances:

Living with many credit cards may pose a difficulty, and it becomes more complex if you have different billing cycles, due dates, and reward formats. Closing unused cards and having tighter control over those that remain can help you keep track of your financial situation.

  • Credit score impact:

Lenders tend to consider the ratio of credit limit to the existing balances of all cards at the time of disclosing the credit score. Therefore, it is wise to close the cards with high credit limits to avoid credit score degradation.

How does closing of credit cards affect your credit score?

Closing credit cards can impact your credit score in several ways:

  • Credit Utilisation Ratio:

If we carry a balance on the card, that might act as a plus factor. Credit Utilisation ratio is increased when the total available credit is reduced by closing the credit. Thus closing credit cards does affect the credit score.

  • Average Age of Accounts:

The card closing calculations naturally bring down the average age of credit accounts, as the closed credit account will not be counted anymore. If one is adhering to a long credit history, closing the oldest account will likely hurt the credit score.

  • Credit Mix:

The cancellation of a credit card may decrease a credit mix, which refers to the various types of credit accounts you hold, such as a credit card, loan, and mortgage. If you have a diverse credit portfolio, closing a credit card can slightly harm your credit score.

  •  Payment History:

Closing your credit card does not directly affect your pay history or payment history, but you must ensure that you make payments on time so that negative impressions do not appear on your credit reports.

How to close credit cards without affecting your CIBIL score?

Credit card closing without affecting your CIBIL score is tricky and requires prior planning and knowledge. Here are some steps to minimise the impact:

  • Payoff Balances:

Ensure there are no remaining debt claims before you close the credit card to spare your credit report from getting any negative items.

  • Keep old cards:

Try not to close all credit cards you have ever had, as they positively contribute to your credit history and per cent of your account’s age.

  • Monitor Credit Utilisation:

Monitoring your credit utilisation is quite important. Pay balances through other cards and maintain a low credit utilisation ratio, even after closing a card.

  • Consider Alternatives:

Consider alternatives to credit card change, either through product changes or downgrading to lower-grade cards from the same issuer.

  • Inform Credit Bureaus:

Contact your credit bureaus to confirm that the records in your credit report have been updated. This must be done to reflect the closure of the card, the resultant impact of credit card utilisation, and the average age of the accounts.

  • Monitor Credit Report:

Conduct regular checks of your credit report to ensure the account has been reported correctly and that there is no mistake affecting your credit score. Also, it is essential to check your CIBIL score every three months.


Closing credit cards may not affect your CIBIL score adversely if you take proactive steps and follow proper procedures. This can be done by ensuring you pay your balances, monitor your credit utilisation, negotiate waivers of fees, find alternatives, inform bureaus of credit records, and check your credit report regularly. Consequently, you will minimise the impact of your CIBIL score on closing your credit cards.

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