How cancelling a credit card can hurt your credit score.

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 Q. I have more credit cards than I need, and I’m thinking of cancelling some. But, I know that cancelling cards can hurt your credit score. How do I choose which ones to cancel, or should I just keep them all?

A. You’re smart to ask before you make any moves. Canceling credit cards can have a negative impact on your credit score, though that negative impact won’t last forever.

First, think about why you want to cancel.

“If you don’t have a good reason for canceling accounts, then don’t,” said Gerri Detweiler, director of consumer education at Credit.com. “However, if your card issuer is charging an annual fee and won’t waive it, or if you have a cosigner on the account that you no longer want to share an account with, then by all means do so.”

Detweiler said closed accounts don’t disappear from your credit reports. In most cases, they will still be reported for about 10 years after you close them.

And as long as they are on your credit reports, they still have some impact on your credit scores.

For example, Detweiler said, the date the account was opened will affect the age of your credit history. Older accounts help your credit scores.

Detweiler said there’s another very important consideration, and it all depends on how much of a balance you have on your cards collectively.

If you cancel a card, the available credit from that account will no longer count toward your debt usage ratio.

“Most credit scoring models compare your available credit to your reported balances, both individually and in the aggregate,” she said. “If you close an account with a large credit limit, that affects this ratio.”

She recommends you pay particular attention to your debt usage.

“It will be calculated for you, but if you subtract the amount of the credit line you’ll be closing from your total available credit and it changes that ratio dramatically, you may want to think twice,” she said. “Most consumers will earn a good grade for this factor as long as they keep their balances below 20 to 25 percent of their available credit.”

Debt usage accounts for nearly a third of your credit score in some models, so it is an important factor and you want to be careful about hurting it, Detweiler said.

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NJMoneyHelp.com presents certain general financial planning principles and advice, but should never be viewed as a substitute for obtaining advice from a personal professional advisor who understands your unique individual circumstances.