taken from an article on aol. :)
Mistake No. 6:
Closing Paid Off Credit Cards
When you pay off your credit cards, don’t close them to celebrate. Instead let the cards sit with a $0 balance and help to add to your total of available credit. That will help your credit score improve more quickly than closing them out.
Credit scoring companies look at what’s called a credit utilization ratio. The people with the best credit scores have a utilization ratio of about 10 to 20 percent. For example, a person with total credit lines available of $10,000 and a credit usage of $2,000 would have a credit utilization ratio of 20 percent. Suppose that person paid off one of their cards with a credit line of $5,000, closed the card and now has only a $5,000 total credit line with $1,500 in debt. His credit utilization ratio would go up to 30% and his credit score would likely go down.
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