Closing a line of credit may or may not impact your credit history. Here are the reasons you might notice a change:
It can shorten your credit history and make you appear less creditworthy to lenders who prefer to see established lines of credit.
It might reduce the variety of account types in your credit history, which can impact your credit mix.
It could increase your credit utilization rate, which is the amount of credit you're using compared to the total amount you have available. When you close a credit account, you reduce the amount of available credit you have. If you’re borrowing from other credit lines, your utilization will increase. We recommend a utilization below 10% for building credit.
Improving your credit history takes time and patience. But there’s good news! We keep your line of credit open for 12 months after you cancel your subscription. That way, if the age of your credit history is reduced from the cancellation, it won’t show up for at least a year (if at all).
Once you've canceled, any remaining amount in your Secured Credit Building line of credit will be returned to your account right away.