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Steve Rhode


I Closed an Old Store Credit Card and My Credit Score Dropped

Posted: 12/06/2013 4:04 pm

Huffington Post Reader Question

Dear Steve,

I had an inactive credit card with retailer - Fashion Bug. I had not used the card in over 4 years, the balance was zero for at least that long - the card has a $300 limit. Fashion Bug went out of business and subsequently "closed" my account. My credit score coincidentally dropped 12 points that month. How is that possible?

How is that possible? And what can I do to reverse the drop in points?


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Dear Cheryl,

It is unclear if the drop in score was related to the closure of this account or not. It would really depend on what other mix of credit and debt you had that was reporting good things about you to keep your score up.

There are a number of factors which influence your credit score but the primary one is if you have credit and use it responsibly.

Most people make the mistake of avoiding having and using credit and instead think a debit card is going to be a better move.

Having a debit card does not build credit or improve your credit. In fact a debit card is a significantly less safe financial tool to use than a credit card. A credit card will help you to build better credit and act as a buffer between you and the crooks.

It sounds like to me that we need to worry less about a tiny 12 point fluctuation and instead worry more about rebuilding your credit so the closure of an old store card is never an issue.

Please read my free credit rebuilding and improvement guide here.


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  • 5th WORST: California

    California is the worst state for foreclosures, and unemployment and bankruptcy also are severe problems, according to State unemployment rate in July 2012: 10.7 percent (Labor Department).

  • 4th WORST: Arizona

    Arizona has the second worst foreclosure rate in the country, and many Arizonans also have low credit scores, according to State unemployment rate in July 2012: 8.3 percent (Labor Department).

  • 3rd WORST: Florida

    Many Floridians are stuck in foreclosure, delinquent on their credit card debt, unemployed, bankrupt, or have low credit scores, according to State unemployment rate in July 2012: 8.8 percent (Labor Department).

  • 2nd WORST: Georgia

    Georgia is one of the worst five states in unemployment, bankruptcy rates, average credit score, and credit card delinquency rates, according to State unemployment rate in July 2012: 9.3 percent (Labor Department).

  • 1st WORST: Nevada

    Nevada has the worst unemployment rate, personal bankruptcy rate, and average credit score in the country, according to State unemployment rate in July 2012: 12.0 percent (Labor Department).

  • 5th BEST: Iowa

    Iowa has a lower than average unemployment rate, lower than average credit card delinquency rate, and higher than average credit score. State unemployment rate in July 2012: 5.3 percent (Labor Department).

  • 4th BEST: Montana

    Montana has above-average credit scores, fewer personal bankruptcies, fewer foreclosures, and less delinquent credit card debt than other states, according to State unemployment rate in July 2012: 6.4 percent (Labor Department).

  • 3rd BEST: South Dakota

    South Dakota has better than average employment and credit scores, according to It also has fewer personal bankruptcies, fewer credit card delinquencies, and fewer foreclosures. State unemployment rate in June 2012: 4.4 percent (Labor Department).

  • 2nd BEST: Vermont

    Vermont was second best in the country in the foreclosure and personal bankruptcy categories and was above average in the other three categories. State unemployment rate in July 2012: 5.0 percent (Labor Department).

  • 1st BEST: North Dakota

    North Dakota "may be the best-kept secret in the country," says. It was the best state in three categories, including unemployment, and fourth best in the other two, according to But remember that if you move there, you would have to live in North Dakota. State unemployment rate in July 2012: 3.0 percent (Labor Department).


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