Q. I am paying off a credit card account and no longer using it. Which is better for my credit score, closing it or letting it go dormant?

A. As long as you're making regular on-time payments, you should leave your credit card open. Your payment history will boost your credit score. The only thing that might be a negative is the amount of credit that you have used.

Fair Isaac Corp., the developer of the benchmark FICO credit score, penalizes cardholders who have used more than 50% of their available credit. For example, if you have a credit limit of $4,000 and you owe $2,500, that likely would lower your score.

The risk of closing a card with a balance is that it could show up on your credit report as "closed by creditor," which would look like a bad debt. Then you would have to have it changed to "closed by request of cardholder."

Once you have paid off the card, then you can, and should, close it.

Lowering the amount of revolving credit available to you might hurt your credit score a little. But that would be more than offset by ditching all of the annual and monthly fees on your cards, having one less account for identity thieves to target and eliminating all temptation to pull that card out for a spending spree.

Our sample letter shows you how to cancel a credit card correctly in four easy steps.