By Paula Ebben, WBZ-TV

BOSTON (CBS) – Having a good credit score has never been more important.

Your credit score impacts whether or not you can get a loan, and then the interest rate you will pay once you borrow money.

The credit bureaus put a very high value on a long held credit card, so it’s worth thinking long and hard before canceling a card that you have had for a number of years.

“If you can keep accounts open 5-7 years, that’s when you build your depth and you see your score going higher,” said Al Bingham, an author of several books about improving your credit score.

Another item to evaluate is something called the “Credit Utilization” ratio.

This ratio is calculated by examining the amount of credit you’ve used, compared to the amount you still have left. This can count for about 30% of a score.

If you’re considering closing an account, don’t do it if it is your only card. If you have other cards, examine those balances as well.

“Take a look at your other balances on your other credit cards. Are they fairly low? You want to get the balances as low as possible so that you have a low utilization ratio even if you close that credit card and lose that available credit, explained Beverly Harzog, a credit card expert.

Common reasons for consumers closing credit cards are new or increased fees; and higher interest rates.

If you are switching to a new card, keep the old one open until the new one is activated.

“That way your FICO score will start utilizing the new available credit with the new credit card into your FICO score, so you will minimize the impact,” said Harzog.

The rules with credit scores have gotten much stricter in recent years. Even a fluctuation of a few points on your score can have a pretty significant impact.

Bingham believes if a creditor is now under 760, they could see increased costs for credit cards, mortgages, and insurance.

“This is an issue,” said Bingham.

If you still decide to cancel a card, it is best to have a zero balance.

It is acceptable to close a card over the phone, but it is suggested you follow up later in writing. A month later, check your credit report to make sure the account is listed as closed.

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