12/06/2013 04:04 pm ET Updated Feb 05, 2014

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

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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