Why does cancel a credit card lower your credit chalk up? This seems totally counter intuitive to me. Does any one know the

This seems totally counter intuitive to me. Does any one know the reasoning down this?

It's a delicate symmetry the credit bureaus use to determine your value. They want to see you hold credit and good credit. They want to see you hold accounts that you use.
Pay off- not hold balances on.

Closing an justification per se doesn't significantly lower your score- however, having balance does. So that's a weird correlation that some idiot made up and remains surrounded by place.

First, there is no "reasoning" within credit score calculation. When designing the scores, they look at a pool of culture who are in financial trouble and a pool of reports of general public who aren't. You get points for parts of your history that correlate to individuals who aren't in trouble and they transport away points for things that resemble people who are contained by trouble. (Actually, they look at people contained by trouble or in correct shape now and verbs archived copies of the data from yesteryear, to make it predictive.

What the chalk up reflects, surrounded by this case, is that well brought-up credit customers have substantial unused revolving credit and long histories next to their current credit card issuer. When you close a card, you are chopping off the history for that statement, and, you are reducing your unused-but-available credit. Because you entail to have unambiguous credit that is UN used.
so if you own a credit limit of 1000, you should never use more than 500 and you should earnings more than the minimum payment respectively month but never pay it rotten completely because
that shows you can manage your money at an exceptable smooth on a regular basis.

All of the answers reflect some of the information. To simplify - voice I have 3 credit cards - they respectively give me a confine of $10,000 - so I show credit available to me of $30,000. But I have charged $5000 on respectively of 2 of the cards - so I then show debt of $10,000 and credit available to me of $20,000. Then, I guess I would benefit if I just didn't enjoy the 3rd card, so I cancel it. So later I show a debt of $10,000 and credit available to me of $10,000. I have essentially reduced the amount of credit available to me, and retained matching amount of debt. Its a numbers game. I know that to have glorious credit card score, it is vital to have oodles CC. Also, the score go up as you use it more and pay them in good time. If there is high-ranking debt, it also brings down the score a bit.

A constant revolving splash of credit is good - especially if you pay envelope it on time and you own had it for years. it's sort of close to a reference. something they can look at and enunciate "Hey, she manages her money and pays her bills on the dot - and has for the final 5 years"... when you don't have anything (liike adjectives all your credit cards - it's resembling having no reference and they have no proof that you are managing your money properly. I know it sounds strange. Not saying I am crazy something like the system, but that's how it works. it's all numbers and the bank's odd logic.

Answers: Now for the complete answer.

30% of your score is base on your debt to credit ratio, so if you have 3 cards beside $5,000.00 limits for a total of $15,000.00 and enjoy balances of $4,000.00 you usage is 26.66% which is beneath 30 and that's where you requirement to keep it for the baest mark.

Now, if you cancel 1 of the cards your total is reduced to $10,000.00 near the same be a foil for so now your usage is 40% and your chalk up takes a hit because you go over 30% usage.
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