This isn’t a myth created by the credit card industry to get you to keep your unused credit cards, canceling a credit card could potentially lower your credit score. Your credit score is calculated based on five factors and when you cancel a credit card, you will lower your score in several of these categories.

• Payment history
• Amount owed
• Length of credit history
• New credit
• Types of credit used

The major piece of the “Amount owed” category is something called credit utilization, that’s a calculation of how much of your available credit you’re currently using. When you cancel a credit card, your credit utilization will increase since your amount of available credit will decrease by the credit limit of that card.

As for “Length of credit history,” that’s simply an average of the ages of your credit cards. If you cancel your oldest card, your average will be lower and thus your risk will increase (you’ve had a shorter history of credit). This, of course, means that if your credit card is fairly new, canceling won’t negatively impact your score as much.

Now, there are non-credit score related benefits to canceling a credit card that could outweigh the immediate disadvantages of canceling that credit card. If you are no longer using that card and never will ever use it again, keeping it around serves no purpose and you run the risk of losing it or having someone steal it. If keeping it around at a $0 will only tempt you into spending with it because you’re not using it, that’s another reason to cancel the card. You have to weigh the benefits with the drawbacks and then make your decision, but from a credit score perspective, it is better to keep a card around.

Read more at Bankrate.