I hate to be the one who says "their ought to be a law..." but their ought to be a law that forbids companies from lowering your credit score when you close a credit account with a zero balance.
Blame FICO, it’s the scoring method all three credit bureaus use.
The less credit you have and use, the lower your score. Close a credit account and your score goes down. And tons of other non-intuitive score results can happen as well.
It’s somewhat a game with a couple of obvious options: Never use credit and don’t worry about your score; Use credit wisely to optomize your score and therefore decrease your expenses.
On major credit purchases such as mortgages, the difference can be tens of thousands of dollars.
Or if someone checks your credit. If your insurers, your employer, and others routinely check your credit, then those routine checks shouldn’t be held against you.
your credit score is lowered because the amount of available credit is reduced, increasing your percentage of debt..in other words, if you have two credit card accounts, each for $5000, one is maxed and the other is empty, you carry a radio of 50%. If you close the one with zero balance, you now go to 100% which will clobber the score since you now have NO available credit to use..even if they were all at zero your amount of available credit is reduced which reduces your score. yes, it sucks..