What is a recommended action to prevent negative impact on a credit score when closing credit cards?

Keeping other credit accounts open while consolidating balances onto one card is a recommended action to prevent a negative impact on a credit score when closing credit cards. This approach helps to maintain a lower credit utilization ratio, which is a vital component of credit scoring.

Credit utilization refers to the percentage of your available credit that you are using. By consolidating balances while keeping other accounts open, you continue to have access to higher overall credit limits. For example, if you have one card with a high balance and close it, you reduce your total available credit, potentially increasing your utilization ratio and negatively impacting your credit score. By keeping the other accounts open, you preserve that available credit, helping to mitigate the risk of damaging your score.

Transferring balances to a checking account would not positively affect your credit score since it does not involve keeping available credit. Closing all unused credit accounts may also lead to a decline in available credit, impacting the credit utilization ratio negatively. Similarly, increasing spending on remaining cards can lead to higher utilization, which could detrimentally impact the credit score. Thus, strategically consolidating balances while keeping other credit accounts open is essential to maintaining a healthy credit profile.