Cancelling Credit Card: How it Impacts Your CIBIL Score

• Cancelling a credit card can negatively affect your CIBIL score due to increased credit utilization, reduced average age of accounts, and a less diverse credit mix.
• Credit utilization, which accounts for 30% of your score, can rise if your total available credit decreases after closing a card, even with the same outstanding balance.
• Closing an old credit card can lower the average age of your accounts (15% of score), as older accounts demonstrate a longer history of responsible credit management.
• Your credit mix (10% of score) can be impacted if closing a card reduces the variety of credit types you hold, potentially making your profile seem less balanced.
• To minimize impact, pay off all balances, avoid simultaneous closures, consider downgrading, request limit increases on other cards, and keep older accounts open.