Closing Your Credit Card Accounts
Have you been told in the past that if you simply close some of your
credit card accounts that you can improve your credit score? Have you also
been told that having too much credit is not good for your over all credit score?
If so, you have been given some faulty information.
It is not how much credit or how many accounts you have that will affect your
credit score, it is how many past due or unpaid debts you have that will bring
down your credit score.
Wondering
if you
should still consider closing your credit card accounts? Whether or not closing
accounts will benefit you really depends on your situation. In many cases
closing the accounts will help you do away with your debt, so as long as this
is used as a method of reducing and solving your current debt issues closing
your accounts may be a good thing. Remember the way to improve your credit
is not necessarily to close accounts, but to make sure that you have more available
than used credit. You want to make sure that you have a positive
credit to debt ratio. In other words, the more available credit you have
the better your credit score will be, regardless of how many accounts you have
open.
When You Should Close Accounts
You may want to consider closing your credit card accounts if you are doing
so in an attempt to eliminate debt and get your life as well as your credit score
in a positive place. You should also consider closing your credit card
accounts if you are entering into a debt consolidation program, if you want to
limit your spending abilities, if the account has very high interest, or if you
are having a difficult time paying down your accounts. In most other situations,
it is not advisable to or necessary to close your credit card accounts.
Adding Accounts
You may be afraid to add accounts, but remember it is not the number of accounts
that you have, it is the amount of debt that you currently have. Your
goal should be to keep all accounts at less than 50% but ideally less than 30%
of your credit balances. You should also remember that a lot of the accounts
that you have may not even show up on your credit report because not all creditors
report their accounts to the credit bureaus. For excellent information on
credit repair along with programs and services vist the above link.
Fill in the following
Debt Form for a Free No Obligation Debt Consolidation Quote.
|
