I was wondering If it better to close a creadit card I dont use anymore or keep it open? Which looks better for a credit score? Thanks
Credit cards and credit score?
- Thread starter ouch
- Start date
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BigTruck
ACCOUNT CLOSED
Keep it open!
I just closed one thinking it was the right thing to do. As it turnes out it is better to keep them open with no balances (as long as there are not alot of them)
It looks better to have open accounts with no balances than to have closed accounts.
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IMSICK
ACCOUNT CLOSED
Close it..... It was on of the conditions of my last mortgage. Even tho you may not be carrying an owing balance, there is a line of credit available to you that may be used and will have to be replaced. I don't know how exactly it affects your score, but I know lenders do look at it.... I had 3 - Visa personal, visa buisiness and mastercard personal. All had the same credit limit.... about, and I had to cancel 1 card and provide the cancellation documentation to the mortgage broker.
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BigTruck
ACCOUNT CLOSED
Closing credit cards erases a history of credit which in turn will hurt your credit score..
Its better to keep them open and not carry a balance.. Unless you have 6 or 7 then it might be okay to shut some down. But with 2 or 3 it would be better to leave them open.. ALso one thing many people dont know about credit cards.. Using above 50% of your available limit will ding your credit score also.. I keep mine at only about 35% and pay it off monthly.. to help my credit score.
Its better to keep them open and not carry a balance.. Unless you have 6 or 7 then it might be okay to shut some down. But with 2 or 3 it would be better to leave them open.. ALso one thing many people dont know about credit cards.. Using above 50% of your available limit will ding your credit score also.. I keep mine at only about 35% and pay it off monthly.. to help my credit score.
The more credit cards you have the lower your credit score will be.
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Ollie
ACCOUNT CLOSED
To a point your are correct.
However, if you have 2 or 3, keep them paid off and can show a history of no late payments it REALLY helps.
On the other hand if you 8, even if they are paid off, it will hurt your score. They see it as too much possible debt load.
I carry 2, pay them off every month. My credit score is 820.
There is more to it of cource, other debt comes into play also.
X
XC700116
ACCOUNT CLOSED
One other factor to keep in mind is the total balances you have on them. for instance if you have 3 cards total credit line of $5K each and say you have a total balance of $4.5K split up amoung them. Don't roll one balance onto another and close an account. The total credit line to balance ratio plays heavily on your score. Unless you are doing it to lower your int rate to eliminate the debt faster. Also if you are all paid up and decide to close one close the newest one as the longer the history with a creditor the better.
I'll admit I did some dumb things with them in my younger years but have slowly but surely dug my way out without filing for bankruptcy, borrowing money from family, or one of those stupid debt counceling things.
The best way to boost your score is with secured bank loans and NEVER being late or short on your payments.
I'll admit I did some dumb things with them in my younger years but have slowly but surely dug my way out without filing for bankruptcy, borrowing money from family, or one of those stupid debt counceling things.
The best way to boost your score is with secured bank loans and NEVER being late or short on your payments.
Did not know that. Thanks for the info. I thought it would show that even if you rack up a large balance but pay it off the next statement, that you were pretty responsible. Who knew?
I know its rediculous... But the credit bureau views it as abusing your available credit.. Even if you are paying it off monthly..
hmm.. thanks guys for the info.
Does your credit limit play into your score? $100 vs $100,000? Does it hurt you if you call and request your limit to be raised? Just curious. Thanks.
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shortstop20
Well-known member
^^^^
I am wondering the same, I better get mined raised to $3500 or so. Because I've put as much as $1700 on there. It is only $2000 right now, my score is 730.
I am wondering the same, I better get mined raised to $3500 or so. Because I've put as much as $1700 on there. It is only $2000 right now, my score is 730.
Dont get me wrong.. It doesnt hurt your score like 30 day late payments do and it can go back up pretty quick as you pay these limits down.. Also, im not sure if how much credit you have open would affect your score.. Im not sure that it would.. But it would affect you if you were perhaps trying to get a mortgage or something of that nature because they look at your debt to income ratio.. They (the banks) would be more at risk if you had a much higher credit limit on numerous cards, becasue you could max them all out and in turn not be able to make payments..
Another note, I would only recommend raising credit card limits to those that are disciplined enough to manage the money going on them.. For example, When i got out of high school i got a credit card from a local credit union with a 200$ limit. I also put a line of credit on my checking account for 200$.. I did this to start getting a history of credit and i knew that if i set these cards at lower limits I wouldnt get myself into trouble.. I always had them 75% maxed out buying gas and some food and by the end of the month I would pay it off and I did that until a little while back...
I learned this thing about how your credit score is affected by it.. So i decided i would change my limits but still act as if i had a 200$ limit.. Well now I make more money than i did in high school so i put MY spending limit at 500$ and my CARDS limit is at $10000.. And i make sure i pay the total amount off each month so i dont accrue interest.. If someone is willing to do that then I say the best thing to do is raise the limits on your cards..
Now to people that dont have that discipline I would never suggest that because they would go from maxing out a 200$ credit card to maxing out a 10000$ credit card and they would be in much wose shape than they started..
With you guys on the forum I dont know anybody even close to well enough to say if you have that discipline or not.. BUt I do think credit cards are One of the biggest problems in america today and have a big hand in why there are so many houses forclosed on recently.. Thats because 90% of americans have zero discipline!! But to those that do, credit cards are a very great thing IMO!!
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Oh yeah to answer your other question.. When you call to get limits raised the card issuer will check your credit score to determine how much they are allowed to make available to you.. This is a hard hit.. from that time until 30 days later you can have your credit looked up by others without having your score affected.. But say in a years time you have 5 or 6 of these "hard hits" where creditors are checking your credit. spaced out over the year. It will affect your credit score. One hit in a years period wouldnt do anything.
Credit cards are fine according to my loan officer. The only way you can build good credit with a credit card is of course is to make more than the monthly payment and not to let your balance exceed half of your max limit, this tells credit card companies that your too depndent on credit cards and lowers your score. You can have 1 or 100 cards just as long as you follow those two things.
A quote from this article... http://articles.moneycentral.msn.com/Banking/YourCreditRating/CardsThatHurtYourCreditRating.aspx
The problem is something called "credit utilization," which is the ratio of a cardholder's actual debt to his or her potential debt. In other words, if a consumer has a $10,000 credit limit and a $5,000 balance, the credit utilization is 50 percent. Credit utilization accounts for 30 percent of your credit score. The lower it is, the better it is for your credit score.
The problem is something called "credit utilization," which is the ratio of a cardholder's actual debt to his or her potential debt. In other words, if a consumer has a $10,000 credit limit and a $5,000 balance, the credit utilization is 50 percent. Credit utilization accounts for 30 percent of your credit score. The lower it is, the better it is for your credit score.