What will happen to Tom's credit score?

1. His credit score will go up.
2. His credit score will go down.

   Correct!

   Tom was smart to transfer the higher credit card balance to one with a lower rate. However, he erred when he CLOSED the established account. "Average Age of Credit" makes up 15% of your overall score. Closing an old account and opening a brand new one delivered a "double whammy" to the average age of Tom's credit and dinged his score.
   
   So, the lesson here is important - if you're ever faced with a similar decision, even if you pay a credit card off in full, it is recommended that you do not close the account.

3. This will have no impact on his credit score.