Why Closing Your Kikoff Credit Account and Credit Builder Loan Might Lower Your Credit Score

Thinking of closing your Kikoff account? 

We understand — closing a credit account often feels like the responsible thing to do. But depending on your overall credit profile, closing your Kikoff Credit Account or your Kikoff Credit Builder Loan can sometimes lower your credit score.

To help you understand why that happens, let’s walk through what factors influence your credit score and how these factors may be impacted when you close the Kikoff Credit Account or Kikoff Credit Builder Loan.

1. What makes up a credit score?

While scoring models can vary, most credit scores are generally determined based on these five core categories. Here's a breakdown with approximate weightings:

Factor	Description	Approximate Impact on Score
Payment History	Do you pay your bills on time?	~35%
Amounts Owed (Credit Usage)	How much of your available credit you're using?	~30%
Length of Credit History	How long your credit accounts have been open?	~15%
Credit Mix	Do you have both revolving (credit cards) and installment (loans)?	~10%
New Credit	Have you recently opened or closed accounts, or applied for new credit?	~10%

Now, let’s look at how closing your Kikoff Credit Account or Kikoff Credit Builder Loan may affect these factors.

2. Why closing your Kikoff Credit Account may hurt your score

The Kikoff Credit Account is a revolving credit line, similar to a credit card. Here’s how closing it may impact your score:

1. Affects Credit Usage (~30%)
   • When you close this account, you lose available credit — and that can raise your credit utilization ratio.
   • If you're using more of your remaining credit, your score is likely to take a hit.
2. Stops Positive Payment History (~35%)
   • On-time payments improve your score — and Kikoff reports to the bureaus monthly.
   • Closing Kikoff Credit Account stops that stream of positive tradeline reporting.
3. Reduces Length of Credit History (~15%)
   • If Kikoff Credit Account is one of your oldest accounts, closing it may lower the average age of your credit, which can reduce your score over time.
4. Lowers Credit Mix (~10%)
   • If you don’t have many revolving accounts, closing your Kikoff Credit Account reduces the variety in your credit profile — something scoring models reward.

3. Why closing your Kikoff Credit Builder Loan may hurt your score

The Kikoff Credit Builder Loan is an installment account, similar to an auto loan — and closing it can also affect several score categories:

1. Lowers Credit Mix (~10%)
   • Credit scores benefit from having both credit cards and loans. If your Kikoff Credit Builder Loan is your only installment account, closing it may reduce your credit diversity.
2. Stops Ongoing Positive Payments (~35%)
   • Similar to the revolving account, on-time loan payments contribute to your payment history.
   • Closing the loan early removes that ongoing boost.
3. Limits Credit History Growth (~15%)
   • While closed loans usually stay on your report for ~7 years, they no longer contribute new activity or aging.
   • The earlier you close it, the less positive history it builds.

4. Summary: How closing each account may affect score factors

Score Factor	Credit Account Impact	Builder Loan Impact
Payment History (~35%)	Stops monthly reporting	Stops monthly reporting
Credit Usage (~30%)	May increase utilization	Not applicable
Credit History (~15%)	May lower average age	Stops aging actively
Credit Mix (~10%)	Less revolving credit	Less installment credit
New Credit (~10%)	Not affected	Not affected

5. Final thoughts from your Kikoff team

Closing a credit account doesn’t always cause long-term or permanent harm, but it can have short-term effects on your credit score. It’s all about how that account fits into your overall credit picture.

Kikoff accounts are designed to support credit growth through:

• Low or no fees
• No interest
• Monthly reporting to credit bureaus

If you’re thinking about closing one or both accounts, please consider:

• Will I lose available credit that helps my usage rate?
• Is this one of my oldest or only active accounts?
• Am I still building positive history with it?

If the answer is “yes,” it may be worth keeping the account open — even if you're not using it regularly.

Need guidance? Let’s chat? 

Before making a final decision, feel free to reach out. Our team is here to help you protect the progress you've made. Give us a call at [phone], and we’ll answer any questions you may have.